401(k) Overview

Investment Selection

One of the first things to consider when looking at your 401(k) plan is that not all 401(k) plans are the same. Depending on your employer, certain funds or ETFs may or may not be available within the 401(k). So to better understand each of the available investments in your retirement plan, it is a good practice to review each of these funds to see what they truly entail. Many funds are made up of thousands of individual stocks and bonds and knowing what these securities are helps you become a more informed investor. The second thing to consider when selecting investments is what your risk tolerance is. Some investors are willing to take more risk in their investments for the possibility of higher returns, while others are perfectly fine with taking potentially lower returns for less market volatility. Once you properly understand the investments available and determine your risk tolerance, you are ready to allocate the funds in your 401(k) to specific investments.

Continue reading to learn about 401(k) plan contribution limits.