At first glance, saving and investing can look like the same thing. In both cases, you’re pulling money from your checking account and putting it into a fund where you’ll (hopefully) let it sit for a long, long time.
Most people open a 401(k) with their employer without asking many questions. After all, a 401(k) is one of the most popular types of retirement funds in the United States, given that 80 percent of U.S. workers have access to a 401(k) through their employer.
But not all 401(k) plans are created equal. Employers have control over a number of features of a 401(k) plan, and it’s important to know the fees, matching limits, vesting requirements, and other criteria that can affect the value of a 401(k).
Is investing in your retirement fund part of your financial plan? Many of us put money in our savings accounts, invest in a 401(k) at work, and/or have an individual retirement account (IRA) that we contribute to for retirement. These options are valuable, but they may not generate enough money to comfortably cover your ideal retirement lifestyle. To achieve your long-term financial goals, consider adding some strategic investing to your financial plan.
Financial security starts with saving money today to ensure that you’re prepared for anything that could happen down the road. That means not only putting money into a savings account where it’s secure and can earn interest, but also creating a diversified investment strategy that will help you make the most of your money.