Here's a piece from Yahoo listing the top five mistakes of 401k investing. Their list:
- Mistake 1: Failure to enroll in an employer's plan
- Mistake 2: Contributing only enough to get the employer match
- Mistake 3: Keeping too much of your 401(k) in company stock
- Mistake 4: Taking a loan from your 401(k)
- Mistake 5: Failure to properly allocate savings
My thoughts on these:
1. There's simply no reason not to enroll in a 401k. Especially when you consider that many employers give you free money for doing so. That said, 100% return on your money doesn't seem to be enough for some people.
2. My opinion on the best way to maximize retirement savings is 401k to get the full match, then a Roth IRA, then fill up the 401k.
3. Lots of people are putting way too much 401k money in their company's stock. It's not a good idea.
4. If you need cash, don't rob your 401k.
5. Personally, I invest in index funds. And I don't keep a ton of cash sitting by.
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