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9 Ways To Grow Your 401k

There is a saying, “The best time to start contributing to a 401k was yesterday. The second best time is today.”

Are you looking for strategies to optimize your 401k’s growth and ensure your financial future? Then look no further. In this article, we’ll go through what 401k stands for, nine ways to increase the growth of your 401k, the need for it, and the steps to manage your 401k. 

Let’s start from the core by understanding what 401k is. 

What Is a 401K Plan?

 

What Is a 401K Plan?

A 401k plan is a type of employer-sponsored retirement savings plan.  This plan lets employees deposit a percentage of their pay to individual accounts, and contributions are frequently matched to some extent by the company. There are several ways funds from a 401k plan can be invested, including stocks, bonds, and mutual funds. 

In layman’s terms, a 401k plan is basically a contribution plan. The plan allows the employees to contribute to their paychecks before or after paying taxes, depending on the plan.

Let us see how this plan works.

How Does the 401k Plan Work? 

 

How Does the 401k Plan Work? 

To encourage Americans to save for retirement, the United States Congress created the 401k plan. There are a number of advantages to it, but the most important and beneficial advantage is that 401k plans include tax breaks.

A 401k plan allows employees to specify a percentage of their income to be withdrawn and invested in their account with each paycheck. Participants can allocate their assets among the plan’s investment options, which often include a number of mutual funds.

This raises the question of why we need this plan. Let us find the answer in the following paragraph.

Benefits of Having a 401k Plan

 

Benefits of Having a 401k Plan

Employer-sponsored 401k plans allow employees to contribute a portion of their salary toward retirement savings. The following are some benefits of having a 401k plan:

  1. Tax-Deferred Savings- 401k plans have the primary advantage of enabling employees to save for retirement tax-deferred, which means that the money contributed to the account is not taxed until it is withdrawn. Employees may save more for retirement since they do not have to pay taxes on their contributions, letting their savings grow faster.
  2. Employee Matching Contributions- Another advantage of 401k plans is that many firms match employee contributions, allowing employees to save even more for retirement. An employer, for example, may agree to match an employee’s contribution up to a particular percentage of the employee’s pay. This can be an attractive benefit for employees because it is like getting free money for retirement.

Overall, 401k plans may be a crucial aspect of a person’s retirement savings strategy, assisting them in saving for the future and enjoying a comfortable retirement.

Let us look into the 401k investment options to find out more about these plans.  

401k Investment Options

 

401k Investment Options

The following are different types of 401k investment options:

  1. Company Stock-  If you work for a publicly traded company, your 401(k) investment menu may include company stock or a fund that buys only your company’s stock. Offering company stock as an investment choice gives you the incentive of partial ownership. It also provides a way to let you share the profits if the company prospers.
  1.  Individual Stocks And Other Security– Some 401(k) plans allow you to buy a wide assortment of securities through a brokerage account. You can give buy and sell orders just as you do with a regular, taxable account. Because the entire account is tax-deferred, you owe no capital gains tax on the profit if you sell a stock you’ve purchased for more than you paid.
  1. Annuities That Change In Value– Variable annuities are an investment option in 401k programs. Annuities are a type of hybrid insurance product that combines a number of assets that resemble mutual funds with insurance coverage.

All these 401k investment options provide different plans and advantages so that one can choose the best option for their retirement plan. Individuals should carefully consider their investment choices and diversify their investments to manage the risk.

How can we grow or manage our 401k growth? The answer to this question is in the paragraph below. 

9 Ways To Grow Your 401k 

Here are nine strategies for growing your 401k account:

  1. Contribute As Much As You Can: The more money you put into your 401k, the faster it will grow. Consider gradually raising your contribution rate or directing any increases or bonuses you earn to your 401k account.
  1. Take Advantage of Workplace Matching Contributions: Many 401k plans provide employer-matching contributions, which may be a great way to increase your savings. Make sure you contribute enough to receive the full match from your workplace.
  1. Invest In a Diverse Portfolio: Diversification can assist in controlling risk and boost investment results. Consider investing in a combination of stocks, bonds, and other instruments to build a diversified portfolio.
  1. Consider Target-Date Funds: These funds automatically modify their asset allocation based on your retirement target date, which can be a simple method to diversify and manage your risk.
  1. Rebalance Your Portfolio Regularly: As the value of your investments fluctuates, the asset allocation in your portfolio may become skewed. To maintain your preferred asset allocation, consider rebalancing your portfolio regularly.
  1. Take Advantage of Tax-Deferred Growth: Contributions to a 401k account are made pre-tax, which can help your savings grow quicker owing to the tax-deferred growth.
  1. Avoid Taking Withdrawals or Loans From Your 401k Account: Withdrawals or loans from your 401k account might diminish your savings and result in tax penalties. Consider keeping your funds in the account for consistent growth.
  1. Less Liquidity: While having some cash in your portfolio for emergencies is crucial, allowing too much of your 401k account to sit in cash might lower your potential investment returns.
  1. Consider Getting Expert Advice: If you need clarification about how to invest your 401k funds, consider consulting with a finance professional who can assist you in developing a strategy that is appropriate for your circumstances.

These are some ways in which you can grow your 401k. In the last section, let us look at another alternative that can help you plan & optimize your investment & retirement. 

The Bottom Line 

“Retirement will sneak up on you faster than you expect.”

You must take an active role in retirement planning. A simple way to accomplish that might be to monitor your investments after researching your options extensively. While on the one hand, you just need to manage your 401k strategies as explained & stick to them; in certain situations, working with a reputable financial consultant to develop long-term goals is necessary. 

Just like 401k, there are other alternatives that can help you with your investments & make you financially independent to achieve your goal of early retirement. One such alternative is Secvolt. It is a quant hedge fund that monitors all your risks and returns and assists you in attaining your financial objectives and beyond. With its robust risk management system, Secvolt generated 262.1% returns in 2022, a time when the economy was haywire.  
Thus, whether by managing your 401k or with the help of an extraordinary hedge fund like Secvolt, you can plan your retirement very well in advance.

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Ashish Verma

Ashish Verma is the founder and CTO of Secvolt, with close to 10 years of experience in the IT industry. He has been the technical backbone of the company and has worked tirelessly to make the technical infrastructure robust. He is a passionate entrepreneur who generates solutions that have the potential to bring change.

In order to ease the client’s interaction with Secvolt, he has strived to develop the business’s technological foundation and establish a user-friendly platform. Ashish has also contributed substantially to smoothening the company’s administration and ensuring that there are no lacunae in the broad structure of the organization. 

Early Years

Coming from a middle-class family, he was aware of the problems that people faced while using technology. He sought to create something that was simple to use yet had a powerful effect. As he studied computer science, he became eager to offer a solution to real issues. He began his professional career at Amdocs, where he gained expertise in client management while catering to more than 20 clients. Later, he moved to Citicorp, where he had exposure to the investment industry. His time at Amdocs and Citi enabled him to produce high-standard, efficient, and scalable technical infrastructure.

He left corporate jobs for his startup because he was passionate about working on the concept of a smart city platform. He expanded the concept internationally and even collaborated with Global Dignity-Kuwait. Things didn’t work out for him the first time. He states, “My failures didn’t stop me from experimenting and trying new things.” He rose from the ashes like a phoenix and founded FewerClicks, an End to End IT solution company.

He worked on the creation of Solster Finance, a decentralized financial platform based on the Solana blockchain. He created this platform single-handedly which has helped the team raise a $1M investment and a revenue of more than $5M within 6 months of launching. 

He has previously worked on many blockchain technologies and cryptocurrency ventures, which include Decentralized Finance Applications (Defi), Decentralized Applications (Dapps), File Contracts (SIA, record-keeper), Smart Contracts (rust, solidity), and NFT Development. His experience and effective communication have helped many team members understand Secvolt effectively and the underlying technology it is powered by.

He possesses the ideal combination of strategic thinking and excellent business insight. He is responsible for formulating technical aspects of the company’s strategy to guarantee alignment with business objectives. With his drive to experiment with new technologies, he has helped Secvolt achieve a competitive edge. Being in charge, Ashish never holds back in encouraging the different departments to make profitable use of technology, helping to grow as an unstoppable team at Secvolt!

Hanif Shaikh

Hanif Shaikh is the founder and CMO of Secvolt, with over 8 years of experience in the industry. He plays a crucial role when it comes to the growth of Secvolt. Since the beginning, he has acted as a mentor for each and every employee of the company, and he makes an effort to be accessible to his staff anytime they need him. 

Hanif first entered the Blockchain and Crypto world in 2016, and nothing has stopped him since. He views blockchain as a transparent platform that provides authority and accountability back to the people. He consistently believes that “overcommunication is better than miscommunication.” He has lived by this motto with his staff, clients, and networks.

Early Years

Hailing from Gujrat, a state in India, he is following his dream to contribute to making this world a better place. In the process, he has struggled, made some mistakes, and learned lessons from those mistakes to achieve success in life. His entrepreneurial attitude dates back to his childhood when he learned from his father’s business and aspired to have it all. He came from a humble background and had ambitions to succeed in life.

He has developed two successful businesses from scratch, and in the process, he has inspired young people to start their own businesses. He was an integral part of the Quora Mumbai Meetups and helped it become a great success in a short period of time. Later, he began organizing meetups to raise awareness about blockchain, cryptocurrencies, and their applications. He also shared his knowledge of ICOs, highlighted reputable ICOs, and established a small cryptocurrency community on WhatsApp groups.

He chose to go on a Blockchain Tour in India in 2019 and met some fascinating people. Throughout his journey, he has been able to build an extensive and robust network that has aided Secvolt’s growth. Because of his expertise and understanding of the Crypto Industry, he has been featured on several news channels and has advised the youth on the subject.

He is in charge of the company’s marketing operations and is responsible for developing its marketing strategy and vision. He oversees a group of passionate marketing professionals and plans promotional strategies with the goal of making  Secvolt a global brand. 

He is a perfect blend of a practical attitude and innovative business acumen. He believes in the ability of individuals to perform exceptionally well when given an environment to experiment and explore their passions; a culture that he has built at Secvolt.

Divakar Choudhary

Divakar Choudhary is the founder and CEO of Secvolt who has been trading for more than six years now. He started the business in 2018 with the conviction that if anybody could dominate the market, it was him. He poured all of himself into the business and turned Secvolt into a market-beating machine.

Divakar developed the fundamental quant models that perform risk management and capture alpha using his skills from the previous organization and his time spent in the market. In order to make the system effective, he backtested risk mitigation algorithms and worked on them for more than 4 years to produce results.

Early Years

He began his crypto journey in 2013 after getting his first gaming Laptop and melded in with the Blockchain community like sunbeams on the ocean. He created many YouTube channels at the age of 15 and businesses by the time he was 17. Technology has always piqued Divakar’s interest. He endeavored and succeeded at freelancing in his effort to achieve financial independence. However, he soon realized that freelancing would always keep him in the rat race, and the only way out would be to build a machine yielding generational wealth.

Soon, he started trading using his own capital but suffered a loss in the market. He says, “95% of people lose money & the rest 5% make money from the loss of those 95%.” He then began working on an effective technique to be included in this 5% after losing part of his own assets during the early stages of trading. He began evaluating quant strategies using statistical models.

With his methodology, he once produced a 20% ROI in a single month. With the zeal of creating something exceptional, he borrowed money from friends and family and generated decent returns for them using primitive quant models. Month after month, the system’s efficiency and the competence of the man behind it allowed for excellent market returns.

In the beginning, Divakar worked on his laptop for over 18 hours. It took every ounce of his energy as he executed about 530+ deals daily for 4 years to create this company from the ground up. In 2021, he increased his volume by 827%, trading a total of $52 million and hitting a single account.

In his words-

“What does becoming “THAT” GUY mean to you? Who did you need when you were young? Be that person!”

He is a perfect example of someone who followed his passion and made a fortune from it! He dreamt of creating generational wealth as a youngster, envisioned it as an adult, and is now making it a reality with Secvolt!