Tuesday, June 20, 2006

401K allocation again...

I've just recently been able to contribute to my new company's 401K plan, I've selected a percentage to get all the matching that they will be giving (free money). Now I'm in the position to roll over my previous 401K from my old company to the new one but I'm still holding off on it because the gains on my previous one seems pretty good. I'll probably have to move them soon for easier maintaining and to have a one stop shop for my retirement funds.
401K Basic Tips:
1. If your company matches always take advantage of this to whatever extent they match (free money).
2. Make sure you get no load funds and check the expense ratio of the fund you're getting. 1.x% ratio is high for me. Funds following index' normally have low expense ratio.
3. Research the funds. Check the top companies they are holding and what the fund is about.
4. Don't over diversify. Some funds might have holdings of funds you already have, getting similar funds might put your holdings in the same basket.
5. If your company doesn't have a 401K program look for a different company. And donate to an IRA or ROTH IRA.
6. Determine your retirement age as there are funds that are offered that would automatically adjust to when you'll retire. Something like aggressive to conservative.

My current holdings are:
1. International
2. Small Cap (Aggressive)
3 Mid & Small Cap Blend
4. Large Cap

Here's to retiring early and free.


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