The employer-sponsored 401(k) has largely replaced the company-funded pension plan as the primary source of retirement savings for most Americans. Unlike a pension, however, 401(k) benefits are not automatic. Employees must choose whether or not to participate and then decide how much to contribute and how to best invest their contributions.
Risk tolerance is a term you may have heard about when determining your investment strategy. While you might picture activities such as rock climbing or jumping out of an airplane when you think of risk, it has a different meaning when it comes to investing.
Most of us expect to work until we voluntarily retire from the workforce. But there are any number of things that can and do prevent people from working: severe accidents, life-threatening illnesses like cancer, or memory loss from Alzheimer’s disease. It’s a long list that’s not fun to think about.
Target date funds, or TDFs, have become very popular among investors in recent years. And if you’re opening a new 401(k), this may be an option to consider if you want to minimize the stress of adjusting your retirement strategy as you get older.
You just started a new job and have come across information about your company’s 401(k) in your benefits paperwork. You may be wondering what exactly it is and whether you should sign up. The 401(k) plan got its name from the portion of the IRS tax code that governs its use. In the past, most employees received guaranteed monthly retirement income through an employer-funded pension plan.
Perhaps you’ve lost a job, faced an illness or have been delt a family crisis that emptied out your emergency fund. What are your next steps?
You’re eyeing center-hall colonials in your neighborhood and dreaming about the garden you want to plant in the backyard and all the holiday celebrations you’ll host. You’ve saved toward this goal and think you’re ready to pull the trigger. But the real question is: How much house can I afford?
Or is it?
Social Security’s financial cliff is coming closer into view. Experts project that the fund that pays for government retirement benefits through FICA taxes will be depleted within the next 15 years.
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