What to do with a 401K?
I’m 26, and I have a job that offers a 401K. As of now, I have about a grand in my 401K. Can I use the money now to help with my home improvements? Or should I invest in stocks and bonds? If that is the case, I know nothing about stocks or investments, so maybe I could get some tips?
That would be the dumbest decision ever to take it out and spend it. You will pay a penalty for taking it out, plus taxes and you’ll be lucky if you’re left with 40% of it afterwards. Take a basic finance class to learn about time value of money. At 26, you should know about retirement planning, savings vs. spending. Are you aware that these are your best years to build up your retirement account? If your employer makes a matching contribution then that’s additional free money. If you invested 16% of your pretax paycheck NOW, you will have over $1million in the bank by the time you are 60. You can talk to a CFA for advice – your company plan administrator also offers FA’s to help with planning.
Pick up some books on investing and start reading about retirement planning before its too late.
Finance & Investment Tips : What Is a 401k Plan?