-
401k Planning tips you should know!
According to the Center for Retirement Research (CRR), pension coverage in the private sector has shifted decidedly from defined benefit to defined contribution (401k) plans. Over the last 25 years, employers - large and small - have mostly gotten out of the business of guaranteeing lifetime pension benefits and managing workers' pension investments.
"DC plans, particularly 401(k) plans, have clearly overtaken DB plans as the principal retirement plan for U.S. workers and are likely to become the sole retirement savings plan for most current and future workers." - General Accounting Office (GAO)
-
Responsibility has been placed squarely on the employee. Now it is the employee's job to figure out how much will be needed in retirement and how to invest 401k balances to meet retirement goals. Investing all or most of a 401k account in employer stock used to be considered a safe and simple option. In the post-Enron era, such a simple 401k planning strategy is known to be foolhardy.
For many, 401k planning is a daunting task. Unfamiliar with retirement planning or investment concepts, some people choose to do nothing and hope for the best.
401k Planning is geared toward providing useful 401k and retirement planning information for the average person. Our goal is to keep things simple and user-friendly, but still be effective. We believe that not only can anyone do effective 401k planning by focusing on a few key concepts, it is more essential than ever that they do so. Please browse our site and let us know what 401k planning topics you would like to see covered.
Some Myths About 401k’s
Fidelity issued its 2010 401k report card including facts that debunk common 401k myths:
Myth 5: Roth 401k's are only for older, wealthy employees.
• Not true. More than twice as many active participants in their 20s contribute to Roth 401k's than do those aged 50 and older (9% vs. 4% respectively).
Fidelity Investments-
401k Planning Posts
- Retirement Savings Rates
- How Much Will Social Security Replace?
- IRS Announces 2012 401k Limits
- 5 Ways the Financial Crisis May Permanently Impact Your 401k and Retirement
- The Tax You May Like to Pay on Your 401k Withdrawal
- Consistent 401k Employee Contributions are Critical to Retirement Savings
- GAO Reports on Growth of 401k of Target Date Funds
- Using 401k Rollover to Start a Business
- IRS Announces 2011 401k Limits
- Some Public Pensions May Soon Run Out of Money
- A Number to Remember: 15.7
Public Sector Defined Contribution
As state and local governments reel from escalating retirement costs, more and more are seriously considering the 401k defined contribution plan model. Visit Definedcontributionplan.org to find out more.
