At YP Investors we want you to be financially free and live the life you want. We provide stock analysis tools and strategies for your investments/trades including retirement and 401k info. Most jobs today have 401k retirement plans or something similar as benefits to employees. Knowing so many people have these retirement options, we at YP Investors wanted to put together a good strategy for these retirement plans and provide helpful 401k info.
A common fallacy with 401ks and retirement accounts is you don’t have to do anything but pick one plan, forget about it and you will be set when retirement comes. Unfortunately this is not the case, if you or someone you know has a 401k (or similar plan) you should be monitoring it closer than you think. Let’s get into what strategies you should employ that can lead you to being retired and financially free.
What 401k info you need to know:
Many 401k retirement plans have large fees which might only be shown to the account holder once, when they initially are enrolled in the plan. The fees are typically between 0.5% and 5%, but some can be larger! These are just account fees, not even the “plan” fees that you can pick to invest in. With the account and the plan fees you are left hoping that the plan you select not only keeps up with the average market returns but turns out positive. This should be a major focus and area of concern for you as many 401k plans fail to even beat the market returns.
401k Info: How much should you put into your 401k or retirement plan
The number 1 rule is to always take the company match, its free money! A company match means if you invest a certain percentage of your paycheck, the company will match that percentage or something similar and put that into your 401k or retirement account. It is essentially a free donation to your retirement from your company. For example, if you put in 6% of your salary let’s say your company will match 4.5%. Therefore you put in only 6% of your salary but you get a total of 10.5% of your salary into the retirement account. This strategy will greatly help to grow your retirement account or at least help to counterbalance some of the fees.
If you want to invest more beyond the company match or your company does not do matching, hands down the best thing you can do is to setup a Roth IRA. You put money into this account after it is taxed, but this is good because when you take it out for retirement it is all tax free! This means your money grows tax free in the Roth IRA and you can pick any stocks or options you want!
Think about that for a second. If you invest $5,500 each year for 35 years you will have invested $192,500, and with an annual growth rate of 10% your Roth IRA will be $1,639,697. You will have made $1,447,197 tax free! The 10% annual return is easily achievable because you are not fighting many fees and you have full control over your Roth IRA. With YP Investors you can implement Simple and Proven Technical Analysis Strategies to ease investing and successfully grow your retirement account!
401k Info: What strategies can you use with a 401k or retirement plan?
Many people that have 401k plans have no strategy in place. They do not check yearly or monthly gain or loss, and some the never check their account after the initial setup of the plan. These unfortunate employees are lead to believe they will be set for retirement no matter what because they have the 401k or retirement account. The problem is when they are ready to retire and check their 401k info or their retirement account balance they are greatly disappointed because they have nearly enough for 1 year let alone the next 40. Unfortunately they are not able to retire even after working for the past 40-50 years.
Fortunately YP Investors is here to help anyone and everyone with a 401k and retirement plan so that when retirement comes you can retire and live the life you want! The strategy you want to implement is very simple, all you need to know is the Current Market Conditions from YP Investors. We show the current Market Conditions for example, good or bad, and we alert you any time they change. After you know the conditions, you want to select the appropriate plan:
- When Buying is in control (conditions are good or very good) you want to select a plan that mimics the S&P 500 or a plan that will outperform the market consisting of 100% stocks (if none are available then choose the plan with the most stocks as possible).
- When Selling is in control (conditions are bad or very bad) you want to select a plan that has high quality bonds like U.S. Treasury Bonds. You want this plan to consist of 100% high quality bonds or as close to this as possible.
401k Info: How does this strategy work?
When the YP Investors Market Conditions show Good or Very Good you will be in the all stocks plan and growing your retirement account. Then when you get the alert form YP Investors that Market Conditions have changed to Bad or Very Bad you switch your plan to the all bonds plan. This is where you will be preserving your account value while the market remains shaky or negative. Having your money in the mixed plans that are typically suggested will only hamper your potential gains when the stock market is booming and then erase the gains and account value when it falls.
Our plan of all stocks and all bonds is for any age, even if you are retiring next year. Why leave your money sit in an all bonds plan that is probably losing you money after the fees when you could make 10-20% if the stock market is surging? When it comes down to it, the best you can do is to always know the YP Investors Market Conditions and then pick your plan from there. Be Aware: Check your plans fees to make sure you are not being over charged. Ideally for stocks you want an Index fund which should be no more that 1% fees and it should mimic the market.
401k Info: Significantly improving your return based on the stock plan selected
The last bit of 401k info you need to know is your stock plan. If you have numerous all stock plans available in your 401k or retirement accounts you can put in a little research to greatly increase your returns. As mentioned previously when the Market Conditions are Good or Very Good you should be in an all stocks plan. The next step is to look at all the 401k investment options with all stocks. Then study the stocks that are included in each plan and how heavily each stock is weighted.
Reminder: Check your plans fees. Ideally for stocks you want an Index fund which should be no more that 1% fees.
Stock Weighting means how much percent of each stock the plan has, are they equal weighted or heavily favored in a few stocks. If they are heavily favored plans, are the stocks that are heavily weighted good stocks in positive technical trends? If they are the next thing to check is if the majority of the heavy stocks are beating the market.
You can easily check both the stock trend and if the stock is beating the market using the tools on YP Investors, specifically the Stock Selector. If the top stocks are not in positive trends and they are not beating the market, then you are better off going with an equally weighted plan or one that mimics the market itself. Whatever your choices are, it is going to improve your returns when you check the underlying stocks and bonds within the plans and know the Current Market Conditions.
401k Info: Conclusion and Takeaway
We hope with our 401k info, investing strategies, and tips you are able to grow your retirement account successfully. This really is a simple strategy that does not take much effort, yet it is extremely effective. To recap this simple strategy, all you need to know is the YP Investors Market Conditions and select a plan depending on the current condition. YP Members get an automatic email anytime conditions change so all you need to do is wait for an email and make the plan change, so simple! We want everyone to be financially free and retire when you want to. Good luck on your investments and we hope you grow your wealth to live the life you want!