And so did Knute Iwaszko. Stocks outperform bonds and cash investments over time. Again, if you have a long time frame, go with slightly more risky investments, such as technology, electronics, or speciality stocks. Funds with low turnover, such as index funds, can safely be kept outside the retirement plan. Older investors near retirement might consider shifting to bond funds, and guaranteed investment contracts that give them a set rate of return.
Bonds have less risk than stocks and tend to preserve capital.
Then, when you can join, increase the initial investment amount by as much as you can afford, and use what you have saved to live on. Make the maximum contribution, not just the amount matched, says Mr. Carlson. Going beyond the match gives you a lower tax bill, Carlson notes. Meantime, money in your plan grows through compounding of interest. Getting your firm to offer even a small plan with few investment choices, is better than nothing.