401k

Planning and Monitoring Your Own 401k

Retirement is an important phase of a person's life that cannot be ignored. At some point you need to consider how you will support yourself. More and more people are wanting to exert stronger control over the choices and assets in their 401k retirement plans. Today's investors are knowledgeable about asset management, and are aware that there are a wealth of investment choices that may not be offered by strictly traditional retirement investment accounts. There are, however, resources to guide knowledgeable investors to a more dynamic and self-directed retirement plan. Here are five tips to help you to adequately plan for your retirement:

Analyze your needs sooner rather than later - Many people fail to work out early enough, how much money they will actually need for their retirement. You need to consider your lifestyle - what are you expecting your retirement to be like and how much will you need to pay for your activities? There are several Web sites that provide calculators that can help you figure it out in detail. Check out www.money.com/retirement or www.401k.com.

Don't neglect your 401(k) - The best place to start when it comes to putting money away for retirement is your 401(k). After all, your company's 401(k) retirement plan offers you one thing you'll get few other places - free money - because of the employer matched contributions. Still, amazingly enough about a quarter of the people who have the option to contribute, don't. If you can, consider boosting your contribution to a higher limit, particularly if you are in your thirties and forties and have neglected your 401(k) in the past.

Get the allocation right - Whether you're saving in a 401(k) for the first time, or reassessing your current retirement savings, you'll want to ensure that the mix of investments you have is right for your age and that the amount of risk is proportionate to when you wish to access the funds.

Automate your finances - If you find it difficult sticking to a savings plan, then automate the process by asking your employer to deduct the money out of your pay check before you have a chance to spend it, and get them to put it directly into your 401(k).