Thursday, June 20, 2024

How Can I Invest My 401k

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Roll Your Money To An Ira

How I Used My 401K To Invest In Individual Stocks!

Transfer your money into an Individual Retirement Account .

  • Your savings stay invested, with similar tax advantages
  • You have access to a wide range of investment options
  • You can roll in retirement savings from other jobs
  • You can keep contributing money to the account
  • Loans aren’t allowed, but you may be able to withdraw money before you retire under certain circumstances

Avoid Money Market Funds

Ninety-nine percent of the time Id encourage you to act like my mom. This is the one time Id advise you not to.

My heart sank when I found out my mom had been investing 100% of her 401k money in a money market fund for years. Thats rightshe was invested in zero stocks. Someone equally clueless from work must have checked off that box for her. Money market funds are the most conservative investment fund option, and is like cash investments in terms of returns. Its painful to think about how that money could have grown.

If youre investing in a 401k, youre planning for retirement, which Im guessing is decades from now. You have time to recover if the market goes down, so you can withstand more risk.

The one marked as Short Term in the Asset Class column? I would ignore it, or at least not invest a significant portion of my money in it.

Are You Prepared For Retirement

Find out with My Interactive Retirement PlannerSM

This material is not a recommendation to buy, sell, hold, or roll over any asset, adopt an investment strategy, retain a specific investment manager or use a particular account type. It does not take into account the specific investment objectives, tax and financial condition or particular needs of any specific person. Investors should discuss their specific situation with their financial professional.

Life and annuity products are issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, Ohio. The general distributor for variable products is Nationwide Investment Services Corporation , member FINRA, Columbus, Ohio. The Nationwide Retirement Institute is a division of NISC. Nationwide Funds are distributed by Nationwide Fund Distributors, LLC, Member FINRA, Columbus, OH. Nationwide Life Insurance Company, Nationwide Life and Annuity Company, Nationwide Investment Services Corporation and Nationwide Fund Distributors are separate but affiliated companies.

The Nationwide Group Retirement Series includes unregistered group fixed and variable annuities issued by Nationwide Life Insurance Company. It also includes trust programs and trust services offered by Nationwide Trust Company, FSB.

Read Also: How To Find My Fidelity 401k Account Number

Okay How Do I Move Forward And Start Investing In My 401k In Real Estate

Before you can invest in real estate, youll need to move it to a self-directed custodian that allows you to hold real estate . This can be done pretty quickly and most custodians will help you make the transfer with just a bit of paperwork.

If you want some help, ideas, or even an introduction to a self-directed 401k custodian, we can help. Give us a call at 579-2340 or fill out our form and wed love to help you make this smart move to self directed 401k real estate investing in Denver.

Get More Info On Options To Sell Your Home…

Selling a property in today’s market can be confusing. Connect with us or submit your info below and we’ll help guide you through your options.

Understand How Your Portfolio Is Impacted

Can I Use My 401k Or IRA For Real Estate ...

The key to understanding how your stock portfolio may be impacted is to use the right tools to analyze your current holdings and enable you to perform the proper research to enable your investing strategy.

For example, if your current portfolio is already very defensive and has a low correlation with the current market direction, you may not need to take aggressive action.

Portfolio analytics and stock research are the keys to long-term successful investing. You need a tool that can provide:

  • Detailed Company Financials
  • Dividend History and Estimates

Stock Rover is our recommended Stock Screening, Research, and Portfolio Management tool, winning both our Best Stock Market Software Review and our Best Stock Screener Review.

Stock Rover can perform detailed portfolio analytics and assessment and help with rebalancing your portfolio. Not only that, but it can also connect to your broker and even help you create a Warren Buffett Value Investing Portfolio or a stable Dividend & Income Portfolio.

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Also Check: How To Make 401k Grow Faster

Option : Keep Your Savings With Your Previous Employers Plan

If your previous employers 401 allows you to maintain your account and you are happy with the plans investment options, you can leave it. This might be the most convenient choice, but you should still evaluate your options. Each year, American workers manage to lose track of billions of dollars in old retirement savings accounts, so you should make sure to track your account regularly, review your investments as part of your overall portfolio and keep the beneficiaries up to date.

Some things to think about if youre considering keeping your money in your previous employers plan:

Work With An Advisor For A Tailored Allocation Strategy

In addition to the above options, you can opt to have a financial advisor recommend a portfolio that is tailored to your needs. The advisor may or may not recommend any of the above 401 allocation strategies. If they pick an alternate approach, they will usually attempt to pick funds for you in a way that coordinates with your goals, risk tolerance, and your current investments in other accounts.

If you are married and you each have investments in different accounts, an advisor can be of great help in coordinating your choices across your household. But the outcome won’t necessarily be betterand your nest egg won’t necessarily be biggerthan what you can achieve through the first four 401 allocation approaches.

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Investments Managed According To Your Goals

Your 401 plan may also offer stand-alone investment options that are managed professionally based on your expected retirement date or on your account growth objectives and your tolerance for risk. The most common stand-alone option is target-date funds . Theyre called target date because theyre invested based on the date you expect to retire. TDFs are:

  • Made up of multiple underlying investments
  • Broadly diversified and professionally managed
  • Invested with a risk and reward profile based on years until retirement
  • Named according to the year of expected retirement

Generally, you choose the TDF with the year that most closely matches the year you plan to retire. The funds inside the TDF are invested according to how much time is remaining before your expected retirement year, gradually adjusting automatically to balance asset growth with principal preservation objectives as you get older.

Other stand-alone investment options include balanced funds and target-risk funds. These funds are also diversified, but they dont change as you get older. Rather, you choose them according to your ability to tolerate risk and your need for investment growth. In theory, a stand-alone optionwhether TDF, balanced, or target riskis designed to be your sole 401 investment.

Use Model Portfolios To Allocate Your 401 Like The Pros

Can I Use My 401k To Buy A House

Many 401 providers offer model portfolios that are based on a mathematically constructed asset allocation approach. The portfolios have names with terms like conservative, moderate, or aggressive growth in them. These portfolios are crafted by skilled investment advisors so that each model portfolio has the right mix of assets for its stated level of risk.

Risk is measured by the amount the portfolio might drop in a single year during an economic downturn.

Most self-directed investors who aren’t using one of the above two best 401 allocation approaches or working with a financial advisor will be better served by putting their 401 money in a model portfolio than trying to pick from available 401 investments on a hunch. Allocating your 401 money in a model portfolio tends to result in a more balanced portfolio and a more disciplined approach than most people can accomplish on their own.

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Calculate Your Risk Tolerance

All investing is risky and returns are never guaranteed, but it can actually be more risky to keep too much of your savings in cash, thanks to inflation.

Still, you don’t want to go all in on one stock or investment, particularly if a rocky market makes you uneasy and anxious, or likely to do something drastic, like pull your money out of your account.

You’ll want to determine an appropriate asset allocation, or how much of your investments will be in stocks and how much will be in “safer” investments, like bonds. Stocks have the potential for greater returns, but can be more volatile than bonds. Bonds are more stable, but offer potentially lower returns over time.

Financial advisors often recommend using the following formula to determine your asset allocation: 110 minus your age equals the percentage of your portfolio that should be invested in equities, while the rest should be in bonds.

But think about your investing horizon. If you have decades until you’re going to retire , then you can afford a bit more risk. You might choose an 80-20 stock mix for now. When you’re older, you’ll start scaling that back, depending on your goals and, again, your appetite for risk. Experts suggest checking that your investments are properly aligned with your risk tolerance each year and rebalancing as necessary, though how often you actually do will vary based on personal preference.

Let The Government Protect Your Money As Warren Buffett Does

Another strategy Buffett uses is to let the government protect his money. For example, two of the five most significant investments Buffett lists in his 2019 Berkshire Hathaway shareholder letters are giant banks.

Those banks are Wells Fargo and Bank of America . Interestingly, Wells Fargo and Bank of America are two of the infamous too big to fail financial institutions. That means the U.S. federal government must bail those banks out in a crisis because their collapse could trigger a depression.

The federal government bailed Wells Fargo out with $25 billion during the 2008 financial crisis. Moreover, Wells Fargo paid a dividend of 45 on March 1, 2019. Therefore, Wells Fargo is a dividend stock that adds another layer of protection.

Hence, Buffett protects his money by investing in institutions the government is likely to rescue during a crisis. Therefore, Buffett lets the taxpayers protect his funds by investing in big banks.

Buffetts thinking is that banks can run to Washington for help during a major crisis. Furthermore, the politicians will have to bail the bankers out to keep the crisis from getting worse.

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New Videos About Silver Stock Company Stock Investment Trade Stock How To Safe Trading System And Can You Have Individual Stocks In A 401k 401k Investing: Real Example Of 401k Portfolio And Allocations

401K Investing: My 401K Investments and Allocations. Free spreadsheet Included

You can follow the links here to download the spreadsheet:

Video Outline and Time Stamps so you can quickly jump to any topic:

How many funds I currently own in my 401 1:07 My 401k investment allocations 1:45 How much of my 401k is in stocks 2:50 Why im invested this way in 401K 4:15 The downsides of my investment allocation 5:40 My 401K Fund performance 7:30 How much i contribute per month to my 401k 8:10 Other factors to consider before investing in 401k 9:50

My current complete 401 Investing Playlist:

How many fund should I own in my 401k?

I currently own 5 mutual funds. I used to own four. The financial advisor that comes to my firm encouraged me to invest in non domestic equities so I started allocating future contributions into this new fund. As you can see here I have about 15% of my portfolio in Non U.S Equities.

How do I allocate my 401K funds?

Asset Allocation As you can see 80% of my current holdings are in large growth Blue Chip type of mutual funds Ill explain why in a moment. I own 97% stocks in case you are wondering. Im not big on bonds at the moment.

Why Im currently invested this way? There are a few reasons Im invested this way. I want to take a moment to explain why that is so you can understand my mindset.

Invest In Real Estate


Real estate could be a good place to tap into if you are looking to diversify your portfolio. There are a couple options. If you want to get hands-on, you can buy a home and rent it out, flip houses, or rent out your existing home. Or if you dont want to be quite so involved, investing in Real Estate Investment Trusts is another option.

If you are buying a property, experts advise you put the down payment funds in a fairly liquid account, so that its immediately available when you need to make a purchase.

Whichever way you choose to invest in real estate, you want to keep up with the latest economic trends, especially the real estate market.

Unlike many other highly liquid investments, properties cannot be bought and sold for profit in a heartbeat. You want to set aside cash for other life expenses before jumping into real estate, because you are likely to hold the property for a long time.

Best for: Investors with a large sum of cash to cover a down payment and those who understand the real estate market.

Read Also: Why Rollover Old 401k To Ira

Move Your Money To Your New Employer’s Plan

If you have a new employer offering a retirement plan, you may be able to transfer your savings into it.

  • Your savings stay invested with the same tax advantages
  • You might be able to roll in savings from other retirement plans
  • You can make ongoing contributions.
  • The investment options depend on what the plan offers.
  • You may be able to take out a plan loan, or withdraw money before retirement under certain circumstances

Grab All The Free Cash From Your Companys Match

To get started on a tangible level, take a look at your companys 401 options, says Driscoll. Many companies offer an incentive match, encouraging you to invest part of your paycheck into a retirement fund. Whatever they match, put that percentage into your retirement fund its free money.

The incentive match is one of the best parts, maybe the single best, of the 401 plan. And the employer match is the easiest, safest money you could ever make, offering you an immediate return for doing what you need to do anyway.

Many employers will match 50 percent of your contribution and sometimes as much as 100 percent up to a certain amount. A few employers do even better than that, although many employers do not offer a match at all.

Ensure you have contributed enough to get the full company match, says Kirk Kinder, certified financial planner at Picket Fence Financial in Bel Air, Maryland. There isnt any legit reason not to get the full match.

Also Check: What Should I Do With My Old Company 401k

Take Your 401 With You

Most people will change jobs more than half-a-dozen times over the course of a lifetime. Far too many of them will cash out of their 401 plans every time they move. This is a bad strategy. If you cash out every time, you will have nothing left when you need itespecially given that you’ll pay taxes on the funds, plus a 10% early withdrawal penalty if you’re under 59½. Even if your balance is too low to keep in the plan, you can roll that money over to an IRA and let it keep growing.

If you’re moving to a new job, you may also be able to roll over the money from your old 401 to your new employer’s plan, if the company permits this. Whichever choice you make, be sure to make a direct transfer from your 401 to the IRA or to the new company’s 401 to avoid risking tax penalties.

Socially Responsible Investment Options

Can I Use My 401K For Real Estate Investing?

Most traditional 401s do not support ESG rated social investments. Rather, most focus on the very large-scale businesses that are generally focused on revenue-focused, not socially responsible business practices.

When setting up your 401 you likely had a choice of a few mutual funds. However, with an IRA, you have a full-selection of funds to choose from and can create a better long-term strategy based on risk management, ESG ratings, and your retirement goals.

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Investing Beyond Your : How To Do It And Why You Should

Investors have several options to invest extra cash outside of their retirement plan. Building other … assets is important as 401 savings alone may not be enough to fund retirement and you likely have other financial goals along the way.


If you have extra cash to invest after maxing out a 401 or other retirement plan at work, its wise to consider your options. Most investors will have three options: a Traditional IRA, a Roth IRA, or a taxable brokerage account. Though there are important pros and cons to know about each type of account, for high-earning individuals with a significant capacity to save, the taxable investment account offers the most flexibility.

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