INDUSTRY INSIGHT
YOUR FINANCES
SPONSORED CONTENT
Four Strategies
for Your 401(k)
Tips for Successful Retirement
Planning Strategies
A
successful 401(k) is a tactical plan for long-term
investing. People are living longer, meaning that
retirements are lasting longer – sometimes 20 or 30
years. Smart people will invest in their 401(k) now
for the long term with the goal to have sufficient
assets accumulated when retirement time comes.
If you have some type of 401(k) offering at work, it’s a great
opportunity to take charge of your financial future. If your
workplace offers any type of matching program, be sure to
take advantage. Especially in this economy, don’t leave extra
money on the table.
Here are some tips that can help achieve 401(k) success.
1. Resist the urge to stop contributing to your workplace-
provided retirement plan.
Yes, times are tough and money is tight. But an important
driver of human behavior is “inertia.” Once you’re in the plan,
you tend to stay in it, and once you leave it, it will be tough to
restart. Do yourself a favor and stay the course and reap the
benefits when the economy recovers.
2. Keep your focus on the long term.
Retirement plans are long-term financial vehicles, so keep
your eyes on the goals: investing as much as possible for your
future retirement and investing for the long-term. Attempting
to time the markets’ volatility may cause you to miss out on
upturns you can’t predict.
3. Don’t take a loan or a withdrawal.
While many workplace-sponsored retirement plans permit
loans and withdrawals, they are almost always a bad idea,
primarily because you are reducing your assets and you may
be jeopardizing your future financial health. Additionally,
you might be subject to additional taxes and/or penalties.
Withdrawals and distributions of taxable amounts are subject
to ordinary income tax and, if made prior to age 59½, may
be subject to an additional 10% federal income tax penalty.
While loans are generally not taxable, if you leave your
employer you could be faced with immediate taxation and
penalties if you cannot raise the funds to pay off that loan.
The best plan is to look elsewhere for immediate sources
of emergency cash. You will thank yourself during your
retirement years.
4. Think about retirement income rather than a
retirement nest egg.
Many people forget that the whole point of a retirement
funding strategy is to help create a stream of income to live
on during retirement, when you will no longer receive a
paycheck from your employer. So, take advantage of Web-
based tools that help you project how much retirement
income your projected savings and investments will generate.
For many people, it is much less than they imagine, which
could suggest two solutions: working longer or saving more.
Not completely enticing, of course, but probably better than
not having enough money to survive during your retirement.
Staying the course and planning strategically may be the
best ways to help achieve 401(k) success. Take a step back and
look at the big picture.
n Jason Hoeltzel offers securities products and services as a
Registered Representative of Pruco Securities, LLC (Pruco). The
Prudential Insurance Company of America, Newark, NJ and
Pruco are Prudential Financial companies. 1.800.778.2255
This article is not intended to provide tax or legal advice. Neither Prudential Financial,
its affiliates, nor financial professionals render tax or legal advice. You should seek such
advice about your particular retirement accounts and needs from your legal and tax
advisors. 1007972-00001-00, Ed 09/2018, Exp 09/04/2020
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