Tuesday, January 22, 2002
The Enron debacle showed how risky it is to put a large portion of one's retirement assets into company stock. Here are some things to know to better protect your 401K:
Some companies that give employees company stock allow the stock to be converted into other investments at any time.Some employers that match company stock could give 50 percent as company stock and employees can decide where to invest the remaining half.Some employers restrict 401K participants from investing most of their 401K assets in company stock.Portfolio diversity can help endure market changes, just as contributing too much in company stock could leave the employee vulnerable to a market downturn.
Sources: DC Planning Investment; Associated Press