"Participating in an employer sponsored 401(k) plan is one of the simplest and most effective ways to build long term retirement wealth. Setup is effortless, since contributions are pulled automatically from each paycheck, making consistent saving practically hands free. Many employers also offer a matching contribution, which is essentially free money added to your retirement account. Some matches follow a vesting schedule, so it is worth checking the rules for your plan."
"Broad market index funds are common and perfectly acceptable for retirement savings, but by design they track the market rather than outperform it. Target date funds are also widely used and convenient, but they often tilt conservative, especially as the target year approaches. That conservatism can limit growth for investors who could otherwise tolerate more risk. If you want the ability to build positions in specific companies or design a more customized allocation,"
Automatic payroll contributions and employer matching make 401(k) plans an effortless and effective way to accumulate retirement savings. Employer matches may follow vesting schedules, so checking plan rules can reveal opportunities to increase contributions at no extra cost. Inattention can limit growth, add unnecessary risk, or leave money unclaimed. Many plans restrict investment choices, preventing individual stock purchases and sometimes offering conservative target-date funds that reduce growth potential. Broad market index funds track rather than outperform the market. Complementing a 401(k) with an IRA can provide greater investment flexibility while retaining tax advantages.
Read at 24/7 Wall St.
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