Best Investment Strategies for Your 401(k) Plan
Roughly 58% of Americans say the coronavirus pandemic is having a negative effect on their retirement savings, while 72% say the crisis has made them rethink their retirement savings strategy, according to a recent survey by Allianz Life. These statistics show real concern among Americans about protecting their nest eggs in this period of market volatility and uncertainty.
As most Americans rely on their 401(k) or similar employer-sponsored plan for retirement, it is critical to maximize and protect this investment. Here are some strategies to help you do that.
How you decide to diversify your portfolio depends on a few different factors, including your age and risk tolerance. Younger investors may want a more aggressive asset allocation, while those closer to retirement may want to be more conservative. A general rule of thumb for asset allocation is your stock allocation should be your age minus 100. So, if you're 25, you should have 75% stock funds and 25% in bond or money market funds. If you're 50, it should be split 50/50. This is a general guideline, as some people may work longer and want to be slightly more aggressive in their 50s.
Source Fool.com
