Whether you realize it or not (and this just might be the case, as you have gotten this far), the classic 401K’s that have been around for over 25 years, complete with fair employers who are truly looking out for the retirement interests of their employees, are a great deal most of the time. Many of these employers offer a company match to the amount that you have automatically deducted from your pay each pay period to further increase your investment returns.
But even if an employer doesn’t offer a company match, it’s still a wise idea to invest a bit of your current salary into a 401K program, if only for the tax benefits alone, not including your well planned financial future.
Where’s the Catch?
In a typical 401K program, your employer will hire an investment company that has quite a bit of 401K knowledge to handle the details of your transactions. One such company is Fidelity Investments, with a website created especially for their 401K accounts and offerings - www.401K.com. On this site, excited employees with 401K’s managed by Fidelity can view their portfolios, make any necessary changes, as well as track their financial progress (and sometimes declines) through the ever-changing markets of 401K’s.
With this in mind, employers with legitimate 401K programs will not require you to purchase company stock with your 401K investment monies. If they do require you to purchase company stock, it's nothing short of a scam that you should not be duped into falling for. It’s your money and you should be able to decide where you are investing it. That’s why so many corporations use separate investment firms who are unbiased (we hope) in their opinions and are simply paid to help you make the right choice for you. Part of this is to make sure that your portfolio is diversified with some higher and lower risks involved.
No matter which road to retirement you choose to drive down, having a variety of financial sources, from long term investments to simple savings account at your local bank branch, be sure to remain in control of your money’s driver’s seat.
