A 401(k) is like any other pension plan when it comes to utilizing some friendly advice. Here are a few tips to remember when you start your new savings strategy:
1. Establish a mandatory savings goal each month for retirement. Many investors don’t know what the maximum allowable 401(k) contribution is. It is easy to look up, or you can ask your financial advisor for the answer. It can give you a better idea of how much you should be stocking away each month. And if you have a matching plan from your employer, you can leverage that extra money for your monthly contributions.
2. Have all allocations reviewed by a professional financial advisor. Ask your financial advisor to help you allocate your assets in your 401(k) plan according to how aggressive you want to be with your assets. Usually, investments are more aggressive earlier on in the plan, and tend to become more moderate the nearer you are to retirement. Many plans also offer online tools to help you decide on how you want to allocate. You may even be able to talk to a live person who can help you and answer your questions.