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That is up to you. When you
enroll in a 401(k) plan, one of the things you have to decide is how you want to invest
your contributions. Your plan sponsor will give you a choice of options in which you can
invest. You can choose to put your entire contribution in one option, or divide it among
several.
Although there is no minimum number of investment options a plan sponsor is required to
provide, most plans have at least three choices. These often include money market funds,
corporate bond funds, growth stock funds, index funds, international funds and company
stock. The options available to you will depend on your particular plan.
Above all, you should keep in mind that planning for your retirement is a process, not an
event. 401k Forum recommends that participants rebalance their 401(k) allocations every
quarter in order to stay on track. Even if your personal or financial situation hasn't
changed, two other factors certainly will have:
1) the time you have left until retirement will have grown shorter; and
2) if your most aggressive investments are growing faster than the others, they will
comprise a larger percentage of your account.
If you're not sure how to allocate your contributions, you're not alone. In fact, an
entire industry has grown around providing investment advice to 401(k) participants –
and 401k Forum is the first and leading provider in this area. For more information about
getting 401k Forum's service for your company, link to our Visitor Center.
If your company does not yet offer investment advice as part of its 401(k) plan, your HR
or benefits representative can most likely provide you with education materials to help
with your decision. You may also want to check out 401Kafe's online investment basics
course, Wall Street 101. |
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