Making the most of your nest egg; Managing your 401(k), 403(b) or 457 plan
- Decide now how much is too much to lose “the next time around.” If you really have no tolerance for risk, admit it. People often lose money due to an inability to make the decision to sell after a certain percentage of loss.
- With new money that you put aside, you may want to diversify your investments to lower risk.
- Make sure you are dollar-cost averaging. This is what you normally do with most plans. You buy every two weeks or every month, which averages out the costs over time.
- Take advantage of financial self-help books and magazines that can give you a fundamental knowledge of investment choices for your 401(k), 403(b) or 457—if you have any choice in where funds are put, it can help. Take an active part in what may be a very big factor in how you're living the last 15, 20, 25 or more years of your life. Think about the importance of all this and ask yourself some questions regarding your retirement vehicles. When you're evaluating how you are dealing with investments, you can take an inventory by asking yourself a few general questions. The answers can guide you in where you should pay more attention, where you are doing well and where you might want to rethink things.
If you are serious about investing and retirement, here's what you may want to ask yourself as you go along:
- Do I just do what everybody else does when it comes to my 401(k)?
- Do I really understand in what I am investing?
- Do I pay attention to my investments?
- Do I have an exit plan to sell at a certain point?
- Am I retiring all my debt so I can retire debt free?
