While your company may give you information about the funds, you’ll need to where to invest 401k 2016 out which ones are best for you. Since you’re bearing all the risk, it’s important that you choose wisely. When investing for a long-term goal like retirement, you typically want to invest mostly in stocks, which have the best chance to generate returns that outpace inflation. Adding some bonds or cash to your mix can help reduce the volatility of your overall portfolio.

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ETF and Mutual Fund data provided by Morningstar, Inc. 401k – Should You Cash It Out to Pay Off Debt? Note: This is a post from Joan Concilio, Man Vs. It wasn’t an easy decision to make, and it isn’t without some serious ramifications. Warning: If you’re expecting traditional financial advice, you might be disappointed. That means that your employer takes money out of your check, before it’s taxed, and deposits it directly into a specific type of retirement investment account.

Here’s the thing about all these plans: What goes in is not necessarily meant to come out. You’ll pay a penalty to the IRS of 10 percent of the value. 2 years old, when you withdraw it, there’s no penalty, but you DO still pay income tax. So the difference here is the 10 percent penalty. This is an option only when you’ve left a position, and there’s often a delay between when you quit and when the money is available to you, if you do choose this route. June 30, 2013, and I was not able to request the cashout until mid-September! I was willing to take the 10 percent penalty.

Mostly, I want you to first know the basics of what we’re talking about. None of us here at Man Vs. When people ask us about cashing out retirement savings, our big point is this: IT ALL COMES DOWN TO MOTIVATION. Here’s the question we ask our readers: What will motivate you most to GET debt-free and STAY debt-free? If someone writes to us planning to take a cashout, the advice we give is to use ALL of it to attack debt. Not most, not as much as possible, but not a cent to anything else. We’ll tell you this: Take a look at your Debt Tsunami, hit the debts that tick you off the most, or that free up the most cash in a month when they’re gone, and obliterate them.

And then finally, after you’ve paid off some debts or knocked down the balances, and put the monthly payments amounts for the now-gone debts into savings for a couple months, you’d then want to pay that same amount each month onto any remaining debts. But IF you can stick to it, you can make a lot of up-front progress and free up some cash flow to build an emergency fund. Is it always the right thing to do? In those cases, we tend to strongly caution against a cashout. But when it comes down to cashing out retirement savings to pay off debt, in general? Our short answer is to decide what motivates you most. If making some short-term progress quickly and getting some cash freed up for more aggressive debt repayment on the remaining balances motivates you more, then maybe cashing out is the choice you make!