Ten Easy Steps to a Successful 401 (K)

In: Business and Management

Submitted By schul123
Words 1282
Pages 6
Ten Easy Steps to a Successful 401(k)

For the majority of working Americans, the most common vehicle for owning mutual funds is through their employer's retirement plan, but very few people are making the most of this mainstay of retirement planning.
Over the holidays, I had occasion to socialize with a group of very bright, successful people who are saving for retirement. We talked of many things, including their investments. And, sad to say, not one of them could coherently explain what he or she was doing, and why.
Everybody, it seems, wants a quick, easy answer. And for those who are unwilling to take the trouble to figure out what they should be doing, the easy answers usually come from slick sales pitches and superficial media hype about the hottest stocks, funds and managers -- as if successful investing were a popularity contest.
That's the bad news. The good news is that investors can manage their 401(k) plans to make their retirement money work much harder for them.
Lots of people spend at least a dozen hours planning a vacation. I often wonder why so few are willing to spend a dozen hours managing their retirement assets.
The following ten steps to 401(k) success shouldn't take more than a dozen hours. If you're young, they could put an extra $2 million into your retirement fund. Even if this job requires a total of 100 hours, that's a payoff of $20,000 an hour -- for work you can do at home in your spare time.
Let's start with the most basic guideline of all.
Step 1: Be a participant
Contribute as much as you can afford. At the very least, put in as much as necessary to qualify for all the matching money your employer offers. Failing to do that is like turning down a raise in pay.
Step 2: Invest in the right things
This can be the most challenging part of managing your 401(k) plan, depending on the options you have available. But doing this…...

Similar Documents

Comparing Roth Ira’s to Roth 401 (K)’S

...Comparing Roth IRA’s to Roth 401 (k)’s A Roth IRA account is an individual’s personal retirement account that allows them to set aside after tax income up to a specified amount per year. The earning on the account as well as the withdrawals after age 59 ½ are tax free. The Roth 401 (k) combines the features of a traditional 401 (k) with features of a Roth IRA. Both of these retirement plans allows for the individual to contribute to the account without any up front tax deductions. As long as the account was held for more than five years withdraws are not subject to income tax after the normal retirement age. Income limitations If the taxpayer has an income above a certain level, Roth IRA is not available to them. If they are single, the contribution limit is completely eliminated at $120,000. If the taxpayer is married, the joint contribution limited is eliminated when income is above $176.000. Due to the income cut off level, many tax payers are not able to take advantage of the tax free retirement saving the Roth IRA offers. The Roth 401 (k) retirement account allows the tax payers to contribute no matter what their income level may be. There is no limit that applies to this account. As long as the employer offers Roth accounts, and the employee is eligible for the 401 (k) programs, they are eligible to participate. Contribution limits Individuals are able to contribute money into their Roth IRA account January of the present tax year through April 15 of......

Words: 1010 - Pages: 5

A Step to Successful Beginning

...helped the Committee to do their jobs in creating the biggest festival at Teknik Mesin ITB. Giving recommendations, suggestions, and advises to the Committee were my primary duties as a General Advisor. All the working departmens were under my and the OCP’s supervisions. We made sure the Committee worked on the tracks. People might question me why I was involved in other university’s event, I could answer confidently, I need to challenge my self in accordance to the self-development. It was my pleasure to manage and direct people whom I never know before. Though the moments were really exhausted yet stresful, but I was really proud with the result I got in the end. Mechanical Festival had given me a highlighted moments in life. The next step to develop a strong leadership trait in my personality is being a delegate in an international conference known as Model United Nations. I’m selected as one of Unpad delegation to represent Republic of Senegal in Social, Humanitarian, and Cultural Committee at World Model United Nations 2013. In the conference, which is invited more than 2000 students across the countries, I’m going to act as if I were a Senegalese and deliver my speech on behalf them to resolve the current international issues. The conference’s main goal is to compose a resolution in terms of Millenium Development Goals by 2015. Hopefully, my participation in the conference would give another inspirative yet thoughtful ideas for Indonesia. Being a leader is not only......

Words: 461 - Pages: 2

Your 401 (K) Account at East Coast Yachts

...Your 401 (k) Account At East Coast Yachts You have been at your job for East Coat Yachts for a week now and have decided you need to sign up for the company’s 401(k) plan. Even after your decision with Sarah Brown, the Bledsoe Financial Services Representative, you are still unsure as to which investment option you should choose. Recall that the options available to you are stock in East Coast Yachts, the Bledsoe S&P 500 index fund, the Bledsoe Small-cap fund, the Bledsoe Large-Company Stock Fund, the Bledsoe Bond Fund, and the Bledsoe Money Market Fund. You have decided that you should invest in a diversified portfolio, with 70 percent of your investment in equity, 25 percent in bonds, and 5 percent in the money market. You have decided to focus your equity investment on large-cap stocks, but you are debating whether to select the S&P 500 Index fund or the Large-Company Stock Fund. In thinking it over, you understand the basic difference in the two funds. One is a purely passive fund that replicates a widely followed large-cap index, the S&P 500, and has low fees. The other is actively managed with the intention that the skill of the portfolio manager will result in improved performance relative to an index. Fees are higher in the latter fund. You’re just not certain on which way to go, so you ask Dan Ervin, who works in the company’s finance area, for advice. After discussing your concerns, Dan gives you some information comparing the performance of......

Words: 422 - Pages: 2

The Ten Study Habits of Successful Students

...Successful students have good study habits. They apply these habits to all of their classes. Read about each study habit. Work to develop any study habit you do not have. Successful students: 1. Try not to do too much studying at one time. If you try to do too much studying at one time, you will tire and your studying will not be very effective. Space the work you have to do over shorter periods of time. Taking short breaks will restore your mental energy. 2. Plan specific times for studying. Study time is any time you are doing something related to schoolwork. It can be completing assigned reading, working on a paper or project, or studying for a test. Schedule specific times throughout the week for your study time. 3. Try to study at the same times each day. Studying at the same times each day establishes a routine that becomes a regular part of your life, just like sleeping and eating. When a scheduled study time comes up during the day, you will be mentally prepared to begin studying. 4. Set specific goals for their study times. Goals will help you stay focused and monitor your progress. Simply sitting down to study has little value. You must be very clear about what you want to accomplish during your study times. 5. Start studying when planned. You may delay starting your studying because you don't like an assignment or think it is too hard. A delay in studying is called "procrastination." If you procrastinate for any reason, you will find it......

Words: 514 - Pages: 3

Ten Secrets of Successful Training

...The Ten Secrets of Successful Training: 1. Put the emphasis on learning rather than teaching. Put the emphasis on helping the students learn in a practical manner rather than merely teaching them. Because the student will take an active rather than passive role in their training, their skills will be developed more quickly and should be retained for longer. 2. They should only learn what they need to know. Make sure the training objectives are derived from a task analysis and relate to what the students actually need to know. This may mean leaving out what has come to be the accepted content of the course, but it does not prevent the inclusion of material related to building confidence and motivating the students. 3. Determine first what they already know. An essential fact to know is to find out the existing knowledge level of the students before beginning your training. Training them on what they already know will produce boredom and lack of interest in your training. There’s not much point in going over old ground. 4. Let them know what they need to know. Give the students the objectives at the beginning of the training. This means that, from the beginning, they know where they are going, how they are going to arrive there, and most importantly, they need to know when they have arrived. Without this sense of direction, your students will get hopelessly lost. Be careful of giving your students the same detailed objectives that you have used for...

Words: 674 - Pages: 3

K-12: One Step Forward

...K + 12 Education :One Step Forward Even though Kindergarten+ 12 ( K+12) requires huge allocation for implementation, this flagship agenda of Department of Education will enhance the student's acquisition of more learning and thereby equip them with proper tools and skills that will enable them to succeed in college, become globally competitive and employable when they graduate from high school. The enhanced K+12 Basic Education Program seeks to provide for a quality 12-year basic education that each Filipino is entitled to. This is consistent with Article XIV, Section 2 of the 1987 Philippine Constitution which states that “ The State shall establish, maintain and support a complete, adequate, and integrated system of education, relevant to the needs of people and society.” Oppositions to the K+12 system, cite the huge expenditure the government needs to fund for this plan of action. In fact, the said department is oblige to cover salary of more qualified teachers. Moreover, the more students enrolled, the more facilities, books, classrooms and school supplies are in demand and need to prioritize. Furthermore, marginalized Filipinos will suffer more. Primarily, the parents who are truly not in favor of the additional expenses and additional years they have to wait longer before the investments to their child's education reaps dividends. However, under the K+12 intention is not just to add two years of schooling but more importantly to enhance the basic education......

Words: 586 - Pages: 3

401(K) Plans

...Abstract The intent of the paper is to examine current trends in the most commonly defined contribution retirement plan, the 401(k) plan. It will outline the best course of action to achieve an effective plan and maximize employee participation. This paper will review current mandates regulated by government agencies and explain the importance of remaining in compliance. Finally, the paper discusses best practices for implementation, as well as the best ways to promote a 401(k) plan within your organization. Throughout the process the details of the 401(k) plan at Tampa Bay & Company, a small sized organization, will be compared to other non-governmental company 401(k) plans to highlight specific examples and draw comparisons. Overall 401(k) Trends In response to the economic downturn there has been an increasing surge of employers who are lowering benefits associated with 401(k) plans. The most common trends are employers reducing the amount of match, reducing the portion of the match, or eliminating the match altogether. Over the past couple of years several surveys have been completed by investment firms, revealing that the number of employers who have decreased company contributions is on the rise. Some surveys show as low as a 7% decrease, but the majority of surveys claim that the amount is closer to 25% of employers who decreased matches or ceased employee contributions all together. Nearly two-thirds of employers still continue to provide matching......

Words: 3737 - Pages: 15

Ten Steps for Writing an Essay

...Rather than worrying about an essay for weeks, suggest to your child to read through these 10 points, get in some early preparation and have the self-belief that they can do it. Read the essay question carefully Highlight key words. Use the dictionary to check the meaning of any unfamiliar words. Identify the task words that indicate what needs to be done, eg ‘discuss', ‘explain', ‘compare'. Identify the topic words that indicate the particular subject of the essay, eg the character of ‘Juliet' in Shakespeare's Romeo and Juliet, the ‘causes' of World War 1. Identify any limiting words that restrict the discussion to a particular area, eg in ‘Chapters 1-3', during the ‘nineteenth century'. Finish any necessary reading or research as background to the essay Be selective: use sources which are relevant and accessible. Write notes in your own words. Write down quotations that may be particularly useful, but ensure the source of these quotes is acknowledged if they're used. Take note of sources so they can be provided in footnotes and the bibliography. Brainstorm ideas in response to the question Jot down any relevant points. Make note of any relevant evidence or quotes that come to mind. Use a mind map to help stimulate lateral thinking. Develop a thesis (idea/argument) that encapsulates the response to the question The thesis should be a statement that strongly expresses the overall response to the question. Avoid a thesis that's too simplistic – show thought...

Words: 558 - Pages: 3

Ten Billing Steps

...Lisa Collins Instructor: Mrs. Donna Purvis, MBA HLTH245 Principles of Reimbursement Management September 29, 2015 Ten Step Billing Process The ten steps of the medical billing process have been divided into three categories: The visit, the claim and the post claim. Following the billing steps to complete correct claims ensures that providers are paid accurately and timely for services and procedures. The Billing process begins with the preregistration of patients. Collecting personal, basic demographic information, and insurance information and entering that information into the database. All of this personal information can be referred to at any time during the medical billing process. Keeping up to date patient and insurance information makes patient check in more efficient and eliminated potential billing errors. Confirming financial responsibility is the next step in the billing process. Once a patient’s information has been updated in the computer system it is then the medical staffs’ responsibility to determine who will be paying for the services rendered for the appointment. Insurance providers are contacted and benefits are verified as different plans have different levels of coverage. Once the medical staff is aware of what the allowable insurance benefits are, contact with the patient should be made so the patient is aware of their responsibility for out of pocket, non-covered expenses, co-payments, and deductibles. During the appointment, the......

Words: 1284 - Pages: 6

The 5 Steps to a Successful Organization

...Final Paper The 5 Steps to a Successful Organization Jacob Dunnichay Indiana Tech University Table of Contents TOC \t "Heading, 1" Introduction PAGEREF _Toc \h 3 Value and Vision PAGEREF _Toc1 \h 4 Direction and Alignment PAGEREF _Toc2 \h 7 Motive and Empower PAGEREF _Toc3 \h 10 Learning and Change PAGEREF _Toc4 \h 13 Leading in Global and Multicultural Society PAGEREF _Toc5 \h 16 Summary PAGEREF _Toc6 \h 19 References PAGEREF _Toc7 \h 20 Introduction For the purposes of this paper, I have chosen to be the owner of a small hotel chain on the island of Put-In-Bay, Ohio. This organization currently has three hotels, two condos, a large house, two bars, and a fleet of approximately 250 golf carts for rent underneath the owners control. This is a business that has been built from the ground up around its two most successful businesses, Put-In-Bay Resort and Conference Center, which has the largest pool bar on the island, the Blue Marlin Bar and Grill, and Edgewater Golf Cart Rentals. By developing these two businesses in the last eight years, a competitive advantage has been built over competitors that were on the island long before our organization. Put-In-Bay, Ohio is a small vacation island located on Lake Erie. Considering the island is only accessible by boat or ferry, the main form of transportation on the island is golf carts. There are many attractions and family oriented activities that make this island a prime location for vacation...

Words: 5018 - Pages: 21

Ten Steps to a Me Steps

...A Handbook for Development Practitioners Ten Steps to a 29672 ResultsBased Monitoring and Evaluation System Jody Zall Kusek Ray C. Rist THE WORLD BANK A Handbook for Development Practitioners Ten Steps to a Results-Based Monitoring and Evaluation System A Handbook for Development Practitioners Ten Steps to a Results-Based Monitoring and Evaluation System Jody Zall Kusek Ray C. Rist THE WORLD BANK Washington, D.C. © 2004 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail feedback@worldbank.org All rights reserved. 1 2 3 4 07 06 05 04 The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages......

Words: 91537 - Pages: 367

Your 401 (K) Account at East Coast Yachts

...401(k) Account at East Coast Yachts Elijah Clark Walden University 401(k) Account at East Coast Yachts A new company employee is seeking to sign up for the company’s 401(k) plan. The individual is trying to determine which investment option is the best. After gaining information from a colleague, the employee decides to invest in a diversified portfolio. However, the employee is confused on whether to select the Vanguard 500 index fund or equity mutual funds. Assignment Questions The 401(k) Account at East Coast Yachts mini case asks to provide details regarding implications drawn from a provided graph for mutual fund investors. Additionally, the mini case asks whether the graph is consistent with market efficiency. Furthermore, the mini case seeks to understand the reason for making an investment decision for the equity portion of a 401(k) account. Graph for Mutual Fund Investors The general desire for an investor is to receive a return on their investments. The mutual fund has to outperform the market return in order to produce profits. However, mutual funds are unlikely to outperform the market because they usually have average market returns before expenses (Ross, Westerfield, & Jaffe, 2013). Considering the fund managers are responsible for making decisions and achieving results, they often take a high fee, which adds to expenses and deducts from the funds overall value. Additionally, no more than half of equity mutual fund investors are likely to......

Words: 613 - Pages: 3

How to Write a Compare-and-Contrast Essay in 8 Easy Steps

...Introduction How to Write a Compare-and-Contrast Essay in 8 Easy Steps A compare-and-contrast essay might seem like the easiest type of paper to write: just find things that are alike and then find things that are different. Piece of cake, right? There’s a catch, however. It is up to you to argue why those similarities and differences matter; otherwise, you don’t have much of a paper. The following steps will guide you through the process of writing an effective compare-and-contrast essay that actually has something valuable to say. 1) So they’re alike and they’re different. So what? A good paper will not simply offer a summary of themes, characters, or plot. Your job is to think about how these comparisons and contrasts create meaningful connections to a larger issue. 2) Create an effective thesis statement. Again, you need to say why the comparison and contrast is worthy of note. Let’s say you want to compare and contrast the heroines of Pride and Prejudice and Jane Eyre. Your thesis might be this: “Although Elizabeth Bennet and Jane Eyre are very different on the outside, their shared internal values connects them in literary history and in the fight for women’s rights.” Now you have a reason for your efforts and a compelling case for your audience’s attention. 3) Select a pattern. There are two ways you can write a compare-and-contrast paper. You can present your arguments in a "tandem" pattern or an "alternating" pattern. Tandem. Separate your pros and......

Words: 770 - Pages: 4

Your 401(K) Account at East Coast Yachts

...Your 401(k) Account At East Coast Yachts 1. The implications that can be drawn from the given graph are: a. The actively managed funds have consistently outperformed the low fee index funds over the past decade of January 1977 through December 1986. b. Although the economic conditions over the decade in review is not mentioned in the case study, based on the fluctuations in the up and down cycles in the funds return suggest that it is following the economic cycle of the given time period. This trend is also apparent in the S&P 500 over the same time periods which offered a return of 1.09% over the decade. (Yahoo Finance, 2012). 2. The graph is not consistent with market efficiency. The efficient market hypothesis states that an investor cannot consistently outperform the market over a long period of time. To consider the market efficient all respected information should be made public and reflected in the current price of the asset (Ross, Westerfield, and Jaffe, 2010). According to the Case Study graph, the actively of the managed funds have consistently outperformed the broader market including the S&P 500 over the given time period. According to Ross, Westerfield and Jaffe (2010), Public skepticism of market efficiency is due to fluctuations in the day to day stock prices. These fluctuations however are not inconsistent with efficiency. Stocks in an efficient market will adjust to new market and economic data by changes in the......

Words: 375 - Pages: 2

Ten Steps in Auditing

...Ten Steps In Auditing Advanced Auditing 606M Jeremy Borden The purpose of this paper is to explain the purpose, goal, and/or outcome of each step in the audit process. The steps included in these pages are essential when conducting any audit of any company. Although specific audit procedures are different from one engagement to the next, the following steps are involved in every engagement. The first step in the audit process for any engagement is to make contact with the potential client. The goal of this step is to obtain new audit business. This is often times is done through the submittal of a general proposal that includes details on the nature of services provided, the qualifications of the firm’s auditors, anticipated fees, and other pertinent information to persuade the client to choose the firm. If the potential client is a publicly held company, arrangements for the audit are made through the audit committee. The proposal and oral presentations are made to provide a basis for selection. If the potential client is a private company, a partnership, or a smaller company, arrangements are made through the owners, a partner, or an executive of the company. This initial contact will often lead to oral discussions, negotiations, and other fact-finding topics before a final formal proposal is written and the audit is accepted. The proposal will also include a mention of contacting the previous auditor of the potential client. This is important because......

Words: 1963 - Pages: 8

Vshare.eu VF Dvdrip | ETH 321 Business Entity Liability W4 | Process Analysis Essay