More people investing in 401ks
An article in Yahoo news states that more and more people are contributing to their employer-sponsored 401k plans. This is great news...we all need all the help we can get when it comes time for retirement.
With traditional pension plans all but gone and Social Security up in the air, Americans are going to have to rely on their own savings to support them in retirement. 401k plans are an excellent way to save because your contributions grow tax-free until you withdraw them. And if your employer offers a company match, it's an even better deal.
But the article also notes that many investors have too much money invested in their company's stock. Now there is nothing wrong with investing in your company's stock, but you need to diversify your portfolio to protect yourself from catastrophe.
Remember Enron? Employees who invested the bulk of their money in company stock were financially ruined when the company went under. But many Americans still have not learned the lesson. If you put all of your eggs in one basket, you are playing with fire.
source article
With traditional pension plans all but gone and Social Security up in the air, Americans are going to have to rely on their own savings to support them in retirement. 401k plans are an excellent way to save because your contributions grow tax-free until you withdraw them. And if your employer offers a company match, it's an even better deal.
But the article also notes that many investors have too much money invested in their company's stock. Now there is nothing wrong with investing in your company's stock, but you need to diversify your portfolio to protect yourself from catastrophe.
Remember Enron? Employees who invested the bulk of their money in company stock were financially ruined when the company went under. But many Americans still have not learned the lesson. If you put all of your eggs in one basket, you are playing with fire.
source article
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