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Best 401K Investments

The Best 401K investments are those supported by the employers who make a matching contribution and make investments to help us retire with dignity.

The Best 401K investments are selected are usually based on the fact that 1. Employees were immediately vested in the plan 2. Employers matched the employees by contributing 6 to 9% in basic and also towards additional contribution.

The Best 401K plan is also selected based on the fund offering and expenses. If the charge is more than 0.8% annually, then it is not worth it.

The trends in 401K plans are Employer Matching Stretching, Re-Enroll and employees paying more fees.

The top 10 401K Plans as per BrightScope in 2014 are:

  1. NFL Player Second Career Savings Plan
  2. Southwest Airlines Pilots Retirement Savings Plan
  3. The Savings Plan of Saudi Arabian Oil Company
  4. Wellington Retirement and Pension Plan
  5. Employee Savings & Stock Ownership Plan Of General Re Corp
  6. Amgen Retirement and Savings Plan
  7. UPS/IPA Defined Contribution Money Purchase Pension Plan
  8. ConocoPhillips Savings Plan
  9. Bayer Corporation Savings and Retirement Plan
  10. ExxonMobil Savings Plan

If the choices of the 401k investments are many, then the following types of investments can be considered:

  1. Target date funds

It is an age based fund. It is a lifelong management investment strategy. The main benefit of this fund is that it helps the investor to keep track of the investment. The problem with this fund is that the fees might run high, thus, making the performance decrease overtime.

The Best in this fund sector is

  1. Fidelity
  1. Mutual Funds

 

In theory, a mutual fund selection offers variety of choices. But in reality, it is not so. Mutual funds have greater chances of getting better or worse after some point of time. The advantage of mutual fund depends on the retirement investor who tunes the portfolios for you.

 

The Best 401k Mutual funds are:

  1. Fidelity Contrafund
  2. Fidelity Low-Priced Stock
  3. Rowe Price Mid-Cap Growth
  4. Rowe Price New Horizons
  5. Vanguard 500 Index Fund

 

  1. Index Funds

 

Index funds are investment schemes aims to replicate the movements of index i.e., the investor has a choice to invest in a large number of companies without buying individual stocks. It’s a collection.

The best Index funds are:

  1. Vanguard Total Stock Market Index
  2. Vanguard Small-Cap Value Index
  3. Vanguard FTSE All-World ex-U.S. Index
  4. Vanguard Emerging Markets Stock Index
  5. Vanguard Intermediate-Term Corporate Bond Index

The best investment plans always depends on the individual. If the plan is limited, it is easy. But if the choice is broad enough, it needs a lot of constant thinking and observation.

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