Fund your 401(k) first, says the author of 'I Will Teach You To Be Rich'—here's why via CNBCMakeIt
Financial experts frequently recommend that you invest in your retirement accounts and that you also make sure you have an emergency savings fund. What should you prioritize, though, and how?
A 401 plan is great because it offers significant tax savings and it's convenient. You can put in money from your paycheck before taxes are withdrawn, which reduces your taxable income. That means you will pay less in taxes each year. And your contributions are automatically deducted from your pay, so you won't be tempted to spend the money now instead of putting it towards your future.
"That's your company literally saying: 'Hey, here's some free money, do you want to take it?'" Sethi, the best-selling author of "I Will Teach You to be Rich," says."If you don't take that, you're making a huge mistake." And once you have your 401 account set up, it's important that you select how to invest your funds — otherwise your retirement money will essentially act like a savings account. Consider investing your dollars in a target-date fund, suggests Sethi, since that kind of a fund is a popular, low-cost and effective solution that does the balancing for you and largely takes the work out of your hands.
There's a lot of room to invest with a 401. In 2019, you can contribute up to $19,000, and if you're over 50 you have some additional opportunities to put in even more. Having an emergency savings fund can be an important way to take control of your finances and avoid racking up debt for unexpected shortfalls such as car or home repairs."That's going to be a buffer between you and high-cost credit card debt," says Ted Rossman, credit industry expert for CreditCards.com.
Singapore Latest News, Singapore Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Trump executive order brings scrutiny to environmentally conscious 401(k) investmentsAs regulators review energy investments in retirement plans, experts weigh in on what that could mean for burgeoning ESG investments.
Read more »
Even 75% of Americans in the best 401(k) plans won’t have enough to retireMany workers don’t save enough for retirement or undermine themselves — still, there are a few fixes.
Read more »
Your 401(k) could make you a millionaire—here’s how one man did itFritz Gilbert started setting aside a portion of each check in a 401(k) in 1985. By 2013, he had $1 million.
Read more »
The golden rule of personal finance is to never, ever touch your retirement savings. Here are three instances in which it might be OK to break that rule.
Read more »
1 in 4 young people dip into 401(k)s to pay off debt—here's why that's a problem'It may seem like a really good idea ... but it likely has real, significant, long-term implications.'
Read more »
A simple strategy can make retirement savings less complicated, no matter how many jobs you've held and accounts you've openedIf you are hoping to roll over your existing 401(k) into a rollover IRA, here's how it works.
Read more »
From 401(k) cash outs to splashy weddings, here are America's biggest money regrets, as told to CNBCFrom 401(k) cash outs to splashy weddings, here's America's biggest money regrets, as told to CNBC. investinyou (In partnership with acorns.)
Read more »
From 401(k) cash outs to splashy weddings, here's America's biggest money regrets, as told to CNBCFrom 401(k) cash outs to splashy weddings, here's America's biggest money regrets, as told to CNBC. investinyou (In partnership with acorns.)
Read more »
Uber wins $1B investment from Toyota, SoftBank fundJapanese car giant Toyota and investment fund SoftBank Vision Fund have unveiled an investment of $1 billion in US ride hailing company to develop self-driving vehicles.
Read more »