401k Investment Strategy
A more detailed level of how each of the five investment strategies will balance to create a feasible early retirement concept.

There are some 401k investment strategies that are very simple yet very effective. It is amazing how many people lose out because they don’t seek out professional advice on how to plan for their retirement. By investing and managing your funds in the right way, you can have a great retirement in which you do not have to worry about the financial side of things. Get it wrong, and your retirement could turn into one long financial struggle. In this article we give some great tips on 401k investing for middle-of-the-road investors.

5 Best 401k Investment Strategiestips 1. 2. and 3 – Target funds, a stable account and a rebalance feature!

First of all, you need to look at the options and features that are available to you. Your plan should offer these 3 things: Target funds, a stable account, and a rebalance feature. This is the secret to keeping a balanced investment portfolio, and is a great 401k Investment stategy.

Firstly, you need to pick your target fund, which means choosing the year that you wish to retire in. You then put half of your new contributions and half of your assets in existing fund investments. The other half of your funds is put into a stable savings account. Then you need to set up the automatic rebalance feature.

Your money will grow in your target fund so long as the stock markets are performing well. The growth of-course will fluctuate wildly but with the increased risk involved you would hope overall to get increased profits. Such target funds adjust automatically to a lower risk profile as you get closer to your retirement age.

Any risk offset by the target fund is offset by the stable savings account, which pays a regular if low dividend. Put together, these give you a portfolio, which is a perfect balance between risk and safety.

As the stock market can have good years and bad years, the auto rebalance feature will mean that at the end of each year your investments portfolio will be rebalanced so that if it was a bad year on the markets money will be transferred into the target fund, and if it was a good year it will be transferred into the savings fund.

4. Maximize your 401k investments

You should make the maximum 401 contributions allowable every year. This takes discipline but it will help you save up the nest egg that you need for a good retirement. This is a somewhat obvious but vital part of your 401k Investment stategy.

5. Maximize the amount your employer pays into your 401k

Always match your employer contributions. Few employers now offer a decent pension, but will match employee contributions up to a certain amount. As this is free money for you, should make every use of this opportunity.

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