Six ways to maximize the value of your 401(k)

Most people are worried about their future. To secure their unknown future, they need to have enough money to secure their life, especially, when people get old.A 401(k) is one of the best ways to secure their life financially. To maximize the value of 401(k), there are six basic rules.First, people should participate in a 401(k). If you do not put anything in it, you will get nothing. Thus, you need to take courage to make money.Second, you should take the company match. Many people do not know how much they should invest into the 401(k), and the best answer is as much as company matches them.Third, there are different types of 401(k), stock, and bonds. If you are young, you can take a risk, so try to invest for higher returns. The reason is young people have enough time to recover losses if they are failed from the investing.Fourth, you should spread and reduce your risk. For example, you buy stock for Oil Company, and then you need to buy stock that goes opposite direction to Oil Company because when Oil Company’ stock goes down, the other stock that goes opposite direction to Oil Company will go up. Thus, people should spread their risk. Fifth, do not invest with loaned money. Some people invest with loaned money. This is very risky. As we all know, people cannot guarantee the return of invests. However, when people loan money, the interest is fixed. Therefore, these could bring you to pay higher interest rate, while you are collecting lower returns from invest. Last, do not withdraw your 401(k) account in any cases. Some people withdraw their 401(k) when they change their jobs, but is is a bad strategy. When you put your money into it longer, you will get more. Therefore, I recommend you to roll that over to IRA or keep it. In conclusion, if you have an opportunity to take 401(k), I recommend you to take that and invest as much as the company matches you. This is the most important thing that longer you put in, money works for you harder.

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