Many of us have a 401(k), but what mistakes can get overlooked? Eric shares a few key points to keep in mind when it comes to your 401(k).
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401(k)s are known for their ease of use as a great investment tool. Having a 401(k) is great for accumulation and dollar-cost averaging. They are not efficient when it comes to distribution though. What 401(k) mistakes should you try to manage and avoid?
Have you ever left a job and left your 401(k) behind with it? Make sure you rollover your 401(k) when you leave. Eric shares a few reasons why this mistake could cost you. Instead, keep control of it by investing it where you want to when you roll it over to an IRA.
Are you rebalancing enough? Some 401(k)s called target date funds do this on their own. But many funds do not, so you’ll want to make sure this is done on a regular basis. Especially as you near retirement, be sure you are properly allocated. Remember, when it comes to target date funds, these are not to be used in lieu of a retirement plan. Target date funds are tools, but you want them to be working correctly for you.
When you use a 401(k) plan, know that the real client is your employer. So, if you work with one of the provided 401(k) advisors, they will likely keep your employer’s best interests in mind. Talk to your personal financial advisor about your 401(k) to see how it fits in your overall financial plan and investment strategy.
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