Retirement plan decisions made easy
Drill Down: If You Do Not Own a Home
Real estate is a good asset to own, but most people in 401k plans already own a home. If you don’t, then we’ll modify this allocation to add some real estate. If you do own a home, do not add additional real estate investments to your 401k because you already have sufficient exposure with your home.
If your 401k plan offers you a real estate fund, which may be called a REIT fund, use it. (REIT stands for Real Estate Investment Trust; it’s like a mutual fund that owns office buildings, warehouses, shopping malls and apartments.) Put the real estate into your stock market allocation, with a weight of 30 percent. That lowers the percentage that you’ll have in actual stocks.
Stock Market Allocation with Real Estate
36% U.S.
18% S&P 500
18% small cap
36% Foreign
18% developed countries
18% emerging countries.
28% Real Estate
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Lesson 1: What the Heck is a 401k, and What’s So Great About It?
Lesson 2: Contributions to Your 401k
Lesson 3: Investments “Cook Book” Approach
» Lesson 4: Investments: How Investments Work
Lesson 5: Loans and Hardship Withdrawals from Your 401k
Lesson 9: Your 401k, Your Other Assets, and Your Life
The 401k ebook is available in text, audio, and video formats. The current selected format is text. You may also switch to the audio or video formats by clicking on the icons at the top of the main lesson page.