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0:60: Start Contributing Let's begin with the basics: The first step to maximizing your 401(k) is to actually contribute to it. Sounds obvious, yet studies show that millions of eligible employees do not participate in their 401(k) plans. So get that application from the folks in Human Resources, fill out the forms, and turn 'em in. 0:52: Start Contributing... Even More! If you're already contributing, try to increase the amount you're socking away. Since the money comes out of your paycheck before you pay taxes on it, the bite won't be nearly as noticeable as you may fear. 0:44: Get the Full Benefit of Your Employer Match Does your employer match a portion of your 401(k) contributions? If so, contribute at least as much as necessary to take full advantage of that benefit. This is free money, folks -- F-R-E-E. Plus, the hundreds of dollars your employer contributes today will be worth thousands after a decade or two of growth. How can you pass that up? 0:36: Stock Up on Stock Most 401(k) plans offer investments in money market, bond, and stock mutual funds. According to Ibbotson Associates, from 1926-2000 the annual returns on those investments were 3.8%, 5.2%, and 11.2%, respectively. Historically, the stock market has been the biggest wealth-creating machine going. In the short term, however, the stock market can make a nest egg look like an omelet. That's why stocks are only suitable for money that will be invested (and left alone!) for at least five years.
Approximate Word count = 960
Approximate Pages = 3.8
(250 words per page double spaced)
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