Tags: retirement | 401k | saving | investing

USA Today: 4 Ways to Make the Most of Your 401(k)

USA Today: 4 Ways to Make the Most of Your 401(k)

(Dreamstime)

By    |   Monday, 13 February 2017 11:55 AM

As 401(k) retirement plans face increased scrutiny from employees who question whether the savings programs are better than traditional pensions, USA Today provides a few tips on making the best of employer-sponsored savings.

  1. Escalate Your Contributions: “Many companies now auto-enroll new employees in their 401(k) plan, then automatically increase the employees’ contribution on a regular basis, typically once per year… Don’t get complacent and assume that auto-increase will magically land you where you want to be by retirement.”
  2. Consider Roth Option: Roth 401(k) allow employees to save after-tax dollars that become tax-free income during retirement. “It can be an excellent choice, especially if you think your taxes are lower now than they will be in retirement; you’re essentially pre-paying and locking in that lower rate.”
  3. Ask for Sponsor Improvement: “Many employees wouldn’t consider tapping on the door of human resources to gripe about their 401(k) plan, but if your plan has high fees or a pricey investment selection, that’s exactly what you should do.”
  4. Seek Financial Advice: “More and more employers are offering financial wellness programs, including debt management programs, budgeting advice and education about the basics of the financial markets.”

While stocks have risen to record highs, most Americans have little reason to cheer, according to the Associated Press.

“Despite the spread of 401(k) retirement plans, the wealthiest 10 percent of households own roughly 80 percent of stock market wealth,” according to the news wire. “The rising concentration of wealth at the top is one reason why the economy's significant gains since the Great Recession ended 7½ years ago haven't been felt by many Americans.”

The Dow Jones Industrial Average more than doubled in President Barack Obama's two terms, but wage growth was minimal for people without a college degree or technological skills.

“Only one-quarter of the poorer half of American households own stock. The average holding for those people is $54,000,” AP reported. “The proportion of Americans with retirement accounts actually declined slightly from 2010 to 2013 — from 50.4 percent to 49.2 percent.”

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As 401(k) retirement plans face increased scrutiny from employees who question whether the savings programs are better than traditional pensions, USA Today provides a few tips on making the best of employer-sponsored savings.
retirement, 401k, saving, investing
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2017-55-13
Monday, 13 February 2017 11:55 AM
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