401(k)

For many, retirement is an opportunity to fulfill their dreams and live in comfort after spending years of dedicated service. But with the rising cost of living, many may wonder whether they will be able to afford to retire. That is why it is imperative to start saving for your retirement as soon as possible. These days, you don’t have to be financially savvy to secure a comfortable retirement. Many employers offer retirement plans to their employees. One popular retirement plan that is offered by businesses is the 401k retirement plan.
Are you making the most of your 401k retirement plan? Contact our 401(k) Professionals at Cranberry Lake Financial to help you secure your financial future!
Other Retirement Plans include:

• Roth
• IRA
• 403B Retirement Plan
• 457 B Retirement Plan
• SEP Plan

The 401k is an employer-sponsored retirement plan that allows employees to contribute a set amount to their plan every paycheck before taxes are calculated. Your contribution to your 401k plan is invested in investment options that you choose from, usually an assortment of mutual funds. One of the benefits of owing a 401k plan is that they are capable of rolling over from one company to another if you were to leave and work at a different company. This means you won’t lose your nest egg and can continue to invest in it. Perhaps one of the best features of the 401k plan, which makes it unique from other retirement plans, is its employer matching option. Many companies will match a percentage of the earnings you contributed to your 401k retirement plan. This gives the employee more buying power. For example, if an employee was allowed to contribute up to 7% of their gross pay and the company would match the contribution at 50%, then the company would contribute an additional 3.5% of the employee’s gross pay into their 401k.

401k retirement plans vary from company to company. Some companies have a 401k company stock. In a 401k company stock, employers will use company stock to match employee contributions to their retirement plans or sometimes will give the employees the option to purchase company stock. However, ever since the fall of Enron, many financial experts warn workers about investing heavily in 401k company stock. Many workers falsely believe that investing in company stocks have less risk than a diverse mutual fund. That is why retirement specialist advice workers to limit the overall investment in a 401k company stock to 10% of your balance. In cases where your company will match your contributions with its own stock as Enron did, experts advise investing your money somewhere else. To determine if you are investing too much in a 401k company stock or if you are taking more risks than necessary with your retirement plan, contact our 401k professional at Cranberry Lake Financial.

If you are planning to invest your money in other ventures, you may want to try buying stock directly form a company. More than 1,500 US and foreign companies such as Home Depot and Wal-Mart allow the public to bypass brokers who usually charge large fees and commissions, when buying stock directly from their company. Buying stock directly from a company, also known as a Direct Purchase Plan (DPP), cost less than buying stocks from an online broker or from a broker offline. Most Companies charge investors nothing for buying or selling stocks. And best of all, you don’t need a lot of money either. There are many companies that accept investments of $100 or less. In cases where your investment is slightly more than a share, companies will issue a fractional share so none of your money is ever wasted. For more specifics on buying stock directly from a company, you should contact a financial professional at Cranberry Lake Financial to help you plan for your retirement.