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Published:
October 15, 2002

401(k)s For Dummies

Overview

Get the most out of your 401(k) in any economy

Filled with sample 401(k) portfolios for every stage of life

Invest your 401(k) money wisely and make the most of your retirement

Want to know what kind of investment mix you need to make your retirement money grow? Don't know what to do with a 401(k) account from your last job? Worried that your company's 401(k) plan doesn't cut it? Relax! This simple, plain-English guide shows you how to manage your accounts, minimize your risks, and maximize your returns.

The Dummies Way
* Explanations in plain English
* "Get in, get out" information
* Icons and other navigational aids
* Tear-out cheat sheet
* Top ten lists
* A dash of humor and fun

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About The Author

Ted Benna, creator of the first 401(k) plan, has more than 30 years of experience as an employee benefits consultant.

Brenda Watson Newmann is Managing Editor at mPower.com, which provides investment advice for retirement and wealth management.

Sample Chapters

401(k)s for dummies

CHEAT SHEET

Knowing how to build your 401(k) retirement plan, devising investment strategies, and making the most of your plan can all help to financially secure your path to retirement. During economic difficulties, you may be tempted to tap into your 401(k) funds, but most often, you're much better off financially if you can leave the funds alone.

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Articles from
the book

You usually have some say in how the money in your 401(k) retirement account is invested, even if your employer manages the 401(k) account. If you're the sole decision-maker, the following tips on how to invest your funds are even more important: Come up with a plan. Know what you're doing and why: Don't invest blindly, hoping that it'll all come out well in the end.
Knowing how to build your 401(k) retirement plan, devising investment strategies, and making the most of your plan can all help to financially secure your path to retirement. During economic difficulties, you may be tempted to tap into your 401(k) funds, but most often, you're much better off financially if you can leave the funds alone.
If your employer offers a 401(k) retirement plan and makes contributions to it on your behalf, you have a leg up in retirement investing. The suggestions in the following list can help you get the most from your 401(k) plan: Contribute enough to get the full employer matching contribution. Use education tools and retirement planning aids from your employer or plan provider to help develop and track your retirement plan.
You want the money in your 401(k) retirement account to grow; so, to build a comfortable nest egg, you need a smart strategy. Use the tips in the following list to guide you as you make decisions about your 401(k): Save in a tax-deferred retirement account as soon as you can, to get more bang for your investment buck.
Finally you're reaping the benefits of contributing to your 401(k) for all those years. As you start taking money out instead of putting it in, use the advice in the following list to keep your nest egg healthy: Develop a strategy to deal with the taxman, because you will have to pay taxes when you take money out of the plan.
Make taking money out of your 401(k) retirement account your last option. The consequences of early withdrawals from your 401(k) hurt your current tax situation and your future investment potential. Keep the points in the following list in mind as you contemplate dipping into your 401(k): Calculate how much tax you'll owe on a hardship withdrawal before you withdraw the money.
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