With the poor economy and decreased job security, all workers need to examine their 401k Plan retirement planning.  Many people have been forced into early retirement due to long-term unexpected unemployment.  You want to make sure that you are doing everything possible to benefit from your 401k. 

Over the past 30 years, the average employee benefits package businesses offered has dwindled.  At one time, an employee could expect a decent paying job, along with full health benefits, 401k plan, stock options, and so on.  Now, this kind of benefit package is a rare offering for a privately owned business.

Although most businesses offer different benefit options, it is left up to the employee to read and understand the employee contract.  It is the employee’s responsibility to take full advantage of all that is offered and avoid crucial oversights.  Most companies do not offer retirement planning advice when you’re hired.

In most instances, the worst thing an employee can do is not participate in the 401k plan, which is often what they end up doing, if they are not automatically enrolled.

401k plan retirement planning can be very complex and confusing, and some errors can come with stiff financial consequences.  If you are unsure about your 401k, retirement planning services are available.  They can guide you through the process, ensuring that you make the decisions that are best for you – not your employer, or the government.

Meanwhile, when planning for your retirement, there are a few simple guidelines to follow to make the most out of your investment:

1. Most employers will meet you dollar-for-dollar up to a certain amount you contribute to your 401k.  At the very least, put in the max amount that your employer will meet you dollar-for-dollar.  This is an excellent deal that should not be passed up.
2. Regardless of the company you work for, never invest more than a small percentage of your 401k into company stock.  This is more important than ever, due to the current economic trend.  Look at the poor people that worked for Enron and WorldCom.  Employees that bought stock with their 401k investment money are going to have a hard time retiring any time soon.
3. If at all possible, do not take out a loan against your 401k.  The amount you borrow will be significantly lower than what it would have turned into if it stayed in the account.  Furthermore, if you cannot make payments or lose your job, then the remaining payments are subject to serious tax penalties.  Even if you don’t default, you are still paying taxes on the amount twice.
4. After you have entered retirement, once you reach the age of 70.5, the government requires you to take out a minimum amount from your 401k.  Do it in the allotted time, otherwise, you will pay a significant penalty.

Note: In 2008, a bill was signed that waived the ‘required minimum distribution’ rule for 2009.  The rule will go back into effect in 2010. 
 
401k plan retirement planning can be a bit tricky; but if you follow these guidelines, make financial plans, and seek consulting services when needed, you will be well on your way to a happy retirement.