As a tax-deferred vehicle, it allows your investment to compound quickly. When employers match your contributions, the extra money automatically guarantees you a good return. Only if your investment choices are limited should you commit less than the maximum to the plan. Many park their money in bonds, money markets, or other conservative investments. Over the long haul, the gains from these plans are likely to be dwarfed by earnings in stock funds.
Stocks are riskier in the short run but historically have had the best long-term returns.
By accessing and using this page you agree to the Terms of Service.