Eliminate Debt Central

Pretty much everyone with a retirement plan or a 401k has seen the value of it reduce over the last couple of years. Fortunately, the stock market now seems to be going through something of a recovery, so what can you do to make the most of this recovery and stick to your retirement plans?

The first thing you should do is to familiarise yourself with the 401k plan itself. For example, do you know what kinds of investment strategy the plan follows? Retirement plans are not all the same and can follow different approaches. Do you have an “employer-sponsored” plan that is not performing well? In that case, get in touch with your Human Resources dept and ask if they are prepared to review the plan (or even change it). They should be open to considering this, because you are not the only employee who is adversely affected.

One of the things you might want to consider if your employer sponsored plan is performing badly is a 401k rollover to an external plan (i.e. one not held through your employer). There is nothing to stop you doing this, but be aware that you are in danger of losing any employer contributions if the plan is not one supported by your employer.

Whatever you do, make sure you continue investing in some sort of 401k plan, don’t stop investing all together. Whatever happens, you will want to fund your retirement and if you stop investing, you run the danger of having to work longer and not having enough funds for when you do finally retire.

If you are struggling for cash, you could consider getting a 401k loan. These loans generally offer low interest rates. But if you do take out such a loan, make sure you pay it back in good time, otherwise you could be penalised on taxes because the IRS will treat it as an early withdrawal.

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