How to Maximize a 401K or Retirement Bonus

Saving for retirement does not have to be a daunting endeavor. With proper investments and sound financial planning, saving for your retirement can be easy.

Things You'll Need

• 401(k)
• Investment money
• Retirement plan
• Savings

Instructions

How to Maximize a 401K or Retirement Bonus

1. Contact the Human Resources department. Begin the documentation process for a 401(k) investment plan.

2. Invest in a 401(k) investment plan to qualify for a employer retirement bonus. The bonus is set up as a matching contribution for annual investment activity made to your retirement account.

3. Do your homework. Check to see if you contribute enough annually to receive the maximum matching contribution from your employer.

4. Check the assigned "default" contribution level of your 401(k) investment plan. When you enroll in a 401(k) investment plan, your employer automatically assigns a contribution level for you to contribute. This can be as little as two percent of your pay. The "default" contribution level assigned by your employer may not qualify for the maximum matching contribution.

5. Move beyond the assigned "default" contribution to get the maximum matching contribution from your employer.

6. Research company stocks and mutual funds to determine the best diversification plan for your money. If you plan to invest in stocks, make sure you own many different stocks in many different types of industries or services. Assign the principle amount of your investment portfolio to mutual funds.

7. Make mutual funds the cornerstone of your investment. Mutual funds provide instant diversification and greater protection for your investment.

Tips & Warnings

• Always consult a financial adviser before beginning any new investment or retirement plan.