Top 5 Features Of A great 401k Retirement Plan.

Many companies now offer 401(K) as the primary retirement plan. Which is a great thing if you know how to make it work for you. But how can you tell if the 401(K) plan a company is offering is top notch or bottom shelf. Well, I will list 6 of the features you should look for when considering joining a companies retirement plan. Please note that even if the plan does not have most of these features, 401k is still the best retirement plan you will come across any time soon.

  1. The company match 70 cents to every dollar you put invest. There are only a few companies that do not offer to match a percentage of what you contribute, these are usually small companies. Large companies that are looking to get and keep talented employees are willing to match at least half of what you invest. Some companies will even match you dollar of dollar and a few rear companies will one up you.

  2. If you can contribute up to 14% of your salary. Obviously the more you save the faster you will reach you goal, but not all 401k retirement plans allow you to invest such a large part of your salary.

  3. The plan allows you to take a loan or allow withdrawal for hardship. Taking money out of your retirement plan is never a good idea, but sometimes it is unavoidable. Many companies will allow you to use some of your investment when you are in a financial crisis, but you will have to prove that it is your last hope and you will have to the pay taxes.

  4. If you get updates and the ability to transfer money among funds daily. One of the best features of any 401(K) plan, is that you are in control of your investment. Having these features give you great flexibility to put you money where you see fit.

  5. Speaking of flexibility, a top notch plan should have at least 10 investment options. Most companies offer at least 6, but the more options you have the better.

    These are 5 features that some of the best 401(K) plans offer. Your company might not offer all of them, but even a few is better than none.

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Posted by J.Scott on Feb 8th, 2010 and filed under Investing. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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