Even though your company has a 401k and you participate in it, you still need to manage it actively in order to maximize its value. An article from USA Today gives a few pointers and tips you should consider:
You generally don't need to do anything (regarding enrolling) if your company decides to automatically enroll you. But you will need to speak up and "opt out" if you don't want to be in the plan.
Companies typically put only 3% of your paycheck into the 401(k) plan. This may not be enough to qualify for the full matching contributions that companies chip in to help build up your retirement funds.
Many companies that have automatic enrollment will put employees in conservative investments. While money-market or stable-value funds are great for the risk averse, those who are young and can stomach more volatility might want to choose a more aggressive investment.
Automatic enrollment generally benefits young and low-income workers the most, because that group is less likely to enroll or to actively participate in a 401(k) plan.
Active investors may be able to do better on their own than with automatic enrollment. The reason: "Employers tend to set their default rates at such low levels that people who would have contributed more end up contributing 3% rather than 6%" of pay, says Jack VanDerhei, an EBRI fellow and Temple University professor.
Most companies don't automatically raise the percentage you're investing as your salary rises. So review your contributions each year to make sure you're saving as much as you can afford.
Even if your company offers automatic enrollment, don't assume that it applies to you. About 78% of large employers with this feature currently enroll only new hires, according to Hewitt.
Good tips to consider. In my opinion, the 401k is one of the great wonders of the financial world. Be sure you do all you can to take full advantage of it.
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