{"id":7456,"date":"2014-02-24T10:15:17","date_gmt":"2014-02-24T18:15:17","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=7456"},"modified":"2016-12-21T07:28:10","modified_gmt":"2016-12-21T15:28:10","slug":"best-401k-investments-retirement-savers","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/","title":{"rendered":"Best 401k Investments For Retirement Savers"},"content":{"rendered":"

Unless you work for a\u00a0retirement\u00a0investment firm or a very large company,\u00a0chances are your options for\u00a0401k investments<\/a>\u00a0are limited.<\/p>\n

This is no accident. For many years, the reining logic among 401k plan administrators was “less is more.” They felt that too many choices would just confuse\u00a0retirement\u00a0savers.<\/p>\n

Confusion leads to hesitation and, ultimately, to procrastination. Financial planners face this issue all the time. Given a choice between action and inaction on the issue of\u00a0retirement, most people are like a deer in headlights.<\/p>\n

\"401k<\/a><\/p>\n

The result, unfortunately, is that they don’t join their company plan or, worse, they do and fail to invest. They end up with the impression of saving for\u00a0retirement, but their actual investments are hardly investments at all \u2014 cash accounts or nearly zero interest money market funds.<\/p>\n

What are the best 401k investments for\u00a0retirement\u00a0savers? If your plan is limited, the answer might be easy, if deflating. If you have a broad choice, which is a good thing, then you have to do a bit of homework:<\/p>\n

1.\u00a0Target-date or “lifecycle” funds<\/strong><\/p>\n

These are likely to be offered in plans with limited choices. Generally, they include a year right in the name of the fund, such as “2040 plan” or similar. These funds pick a potential\u00a0retirement\u00a0date in the future, the number year in the name. The fund managers buy volatile, high-growth investments early on, then slowly migrate to conservative holdings as the target date nears.<\/p>\n

Pros:<\/strong>\u00a0Target-date funds take away the guesswork of portfolio investing and help keep you on track. It’s much less likely for you to be in a dangerously high-risk portfolio as your\u00a0retirement\u00a0age nears.<\/p>\n

Cons:<\/strong>\u00a0Often, such funds are more expensive than necessary, and their\u00a0fees can demolish your performance<\/a>\u00a0over time.<\/p>\n

2. Mutual funds<\/strong><\/p>\n

Common among medium-sized plans, a mutual fund selection in theory gives you better choices than you might otherwise find. In practice, however, you are limited to the 15 or 20 mutual funds the plan sells, and they might be better or worse investments than their peers in any given period of time.<\/p>\n

Pros:<\/strong>\u00a0Active\u00a0retirement\u00a0investors can\u00a0fine-tune their portfolios<\/a>, choosing from among several stock or bonds funds.<\/p>\n

Cons:<\/strong>\u00a0Mutual fund fees are much higher than the fees attached to plain vanilla index funds, and they often underperform the benchmarks.<\/p>\n

3. Index funds<\/strong><\/p>\n

Index funds do not rely on stock picking to achieve their goal. By design, they return the market benchmark at a minimal cost.<\/p>\n

Pros:<\/strong>\u00a0Index funds are absolutely the\u00a0best, cheapest way to track the whole market<\/a>, whatever the asset class.<\/p>\n

Cons:<\/strong>\u00a0You’re on your own when it comes to rebalancing among asset classes, unless your plan offers a portfolio service along with index funds. It’s rare, but things are changing.<\/p>\n

If you can find a way to use index funds or index\u00a0ETFs\u00a0to earn a benchmark return and rebalance periodically, your 401k plan should do fine over decades of a working life. Save enough into the plan and\u00a0your retirement is well in hand<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Unless you work for a\u00a0retirement\u00a0investment firm or a very large company,\u00a0chances are your options for\u00a0401k investments\u00a0are limited. This is no accident. For many years, the reining logic among 401k plan … Read more →<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":7457,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_rev_ctl_limit":""},"categories":[8],"tags":[62,42,43,37],"yoast_head":"\nBest 401k Investments For Retirement Savers | MarketRiders<\/title>\n<meta name=\"description\" content=\"What are the best 401k investments for retirement savers? If your plan is limited, the answer might be easy, if deflating. Here's a breakdown.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Best 401k Investments For Retirement Savers | MarketRiders\" \/>\n<meta name=\"twitter:description\" content=\"What are the best 401k investments for retirement savers? If your plan is limited, the answer might be easy, if deflating. Here's a breakdown.\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/www.marketriders.com\/investing\/wp-content\/uploads\/2014\/02\/White-tailed_deer_Odocoileus_virginianus_grazing_-_20050809.jpg\" \/>\n<meta name=\"twitter:creator\" content=\"@marketriders\" \/>\n<meta name=\"twitter:site\" content=\"@marketriders\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"MarketRiders\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/\",\"url\":\"https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/\",\"name\":\"Best 401k Investments For Retirement Savers | MarketRiders\",\"isPartOf\":{\"@id\":\"https:\/\/www.marketriders.com\/investing\/#website\"},\"datePublished\":\"2014-02-24T18:15:17+00:00\",\"dateModified\":\"2016-12-21T15:28:10+00:00\",\"author\":{\"@id\":\"https:\/\/www.marketriders.com\/investing\/#\/schema\/person\/f2be262f5c0f3ed5ad50d6c40640ba8c\"},\"description\":\"What are the best 401k investments for retirement savers? If your plan is limited, the answer might be easy, if deflating. Here's a breakdown.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.marketriders.com\/investing\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Best 401k Investments For Retirement Savers\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.marketriders.com\/investing\/#website\",\"url\":\"https:\/\/www.marketriders.com\/investing\/\",\"name\":\"MarketRiders.com\",\"description\":\"How To Become A Better Investor\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.marketriders.com\/investing\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.marketriders.com\/investing\/#\/schema\/person\/f2be262f5c0f3ed5ad50d6c40640ba8c\",\"name\":\"MarketRiders\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.marketriders.com\/investing\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/8e06113f594828daaf313d283544d566?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/8e06113f594828daaf313d283544d566?s=96&d=mm&r=g\",\"caption\":\"MarketRiders\"},\"sameAs\":[\"https:\/\/www.marketriders.com\"],\"url\":\"https:\/\/www.marketriders.com\/investing\/author\/support\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Best 401k Investments For Retirement Savers | MarketRiders","description":"What are the best 401k investments for retirement savers? If your plan is limited, the answer might be easy, if deflating. Here's a breakdown.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/","twitter_card":"summary_large_image","twitter_title":"Best 401k Investments For Retirement Savers | MarketRiders","twitter_description":"What are the best 401k investments for retirement savers? If your plan is limited, the answer might be easy, if deflating. Here's a breakdown.","twitter_image":"https:\/\/www.marketriders.com\/investing\/wp-content\/uploads\/2014\/02\/White-tailed_deer_Odocoileus_virginianus_grazing_-_20050809.jpg","twitter_creator":"@marketriders","twitter_site":"@marketriders","twitter_misc":{"Written by":"MarketRiders","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/","url":"https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/","name":"Best 401k Investments For Retirement Savers | MarketRiders","isPartOf":{"@id":"https:\/\/www.marketriders.com\/investing\/#website"},"datePublished":"2014-02-24T18:15:17+00:00","dateModified":"2016-12-21T15:28:10+00:00","author":{"@id":"https:\/\/www.marketriders.com\/investing\/#\/schema\/person\/f2be262f5c0f3ed5ad50d6c40640ba8c"},"description":"What are the best 401k investments for retirement savers? If your plan is limited, the answer might be easy, if deflating. Here's a breakdown.","breadcrumb":{"@id":"https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.marketriders.com\/investing\/best-401k-investments-retirement-savers\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.marketriders.com\/investing\/"},{"@type":"ListItem","position":2,"name":"Best 401k Investments For Retirement Savers"}]},{"@type":"WebSite","@id":"https:\/\/www.marketriders.com\/investing\/#website","url":"https:\/\/www.marketriders.com\/investing\/","name":"MarketRiders.com","description":"How To Become A Better Investor","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.marketriders.com\/investing\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.marketriders.com\/investing\/#\/schema\/person\/f2be262f5c0f3ed5ad50d6c40640ba8c","name":"MarketRiders","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.marketriders.com\/investing\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/8e06113f594828daaf313d283544d566?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/8e06113f594828daaf313d283544d566?s=96&d=mm&r=g","caption":"MarketRiders"},"sameAs":["https:\/\/www.marketriders.com"],"url":"https:\/\/www.marketriders.com\/investing\/author\/support\/"}]}},"_links":{"self":[{"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/posts\/7456"}],"collection":[{"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/comments?post=7456"}],"version-history":[{"count":3,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/posts\/7456\/revisions"}],"predecessor-version":[{"id":7460,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/posts\/7456\/revisions\/7460"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/media\/7457"}],"wp:attachment":[{"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/media?parent=7456"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/categories?post=7456"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/tags?post=7456"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}