| How To Use Your 401k Creatively |
| Articles - Retirement |
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Setting aside some of your income to go into a 401k plan has long been considered to be one of the best ways to prepare yourself for retirement. In addition to that it also offers a tax break which makes it an opportunity that you simply cannot overlook.
Setting aside some of your income to go into a 401k plan has long been considered to be one of the best ways to prepare yourself for retirement. In addition to that it also offers a tax break which makes it an opportunity that you simply cannot overlook. However, it does not always bring the best investment returns. If your 401k is giving you an 8% or 6% return on average every year that is really not a very good return. Anybody who puts their time and energy into investing should be able to do much better than that. Most plans only invest into specific mutual funds and they may not even let you decide which funds you can invest into. If you want to make a higher return on your money then you are simply going to have to look for ways to invest your money more creatively. You will have to step back from the crowd and find other ways to invest money. If you do there are two possible ways to invest your money. The first is by setting up a self directed 401k plan, or a 401k where you actually have control on what you invest into. Not all employers offer this plan and some that do restrict where you can invest your money to just mutual funds. You never know what you will find. Your employer will have some more 401k info on what your specific plan offers. It is worth checking it out. A second option is to take out a loan from your 401k in order to invest into real estate. The 401k loan rules are pretty fair and can give you the money you need to buy or sell properties. The 401k loan rules will help you to get a low interest loan out to buy a rental property and best of all, the interest earned on the loan will also go back to your 401k account, so you make money on the real estate investment and on the interest from the loan. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. For more information on how to get the most out of your plan visit this 401k tips and advice page. Also published at How To Use Your 401k Creatively. |