At Harvest Wealth Partners, our team of experienced financial professionals are dedicated to helping individuals and families throughout Indiana create smart plans for their economic futures. We strongly believe that in order to best plan for one’s future, individuals need to understand their options, and the risks and benefits that those options provide.
Two of the most common types of financial plan options that people frequently ask us about are 401(k)s and mutual funds. Both of these options, either when used solely or together, can be effective in preserving economic wellbeing.
A 401(k) is a type of retirement savings plan that is offered to employees as a benefit of working with a certain company/employer. These plans work by allowing employees to save and invest a portion of their paycheck prior to having taxes taken out (taxes are paid upon withdrawal, not upon contribution). One of the biggest benefits of a 401(k) plan is that sometimes, employers will match contributions for eligible employees.
One key aspect of a 401(k) that is important to understand is this: those who hold 401(k)s (employees) control how their money is invested. This differs from other types of employer-sponsored retirement funds, such as a pension plan.
As stated above, you control how your money in your 401(k) is invested. In order to do so, you will choose between a spread of mutual funds. Mutual funds are investment vehicles that invest in securities, which are bonds or stocks. Mutual funds are named as such because they are truly mutual; funds are pooled from many different investors. Once funds are mutually invested, the manager of the fund invests in a manner that matches the fund’s strategy. Just as funds are mutually invested, so are losses or profits shared.
If you have a 401(k), the money that you, and perhaps your employer, put into the 401(k) will be directed towards a mutual fund, which then invests in stocks and bonds. You can also invest in a mutual fund on your own without having a 401(k). Indeed, mutual funds are a great way to hold a diverse portfolio and plan for your financial future.
At Harvest Wealth Partners, we understand that planning for your financial future and retirement can be confusing. We also understand that things like 401(k) accounts, mutual funds, and securities are all complex investment options, and that when you are putting your own, hard-earned money into a savings or investment account, you want to make sure that it will work for you.
When you call our Indiana financial planning professionals, we will thoroughly explain to you the various options for saving and investing money. We will also review your financial picture and help you to create a financial plan that is customized to you. When you call us, we don’t take shortcuts or offer you a cookie-cutter solution; we listen to you as you talk about your unique financial goals,
To learn more, please contact our offices today. We look forward to working with you.
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