Don't Keep Too Much Employer Stock in Your 401(k)
In some cases the employer's matching contributions are paid in company stock, making the employee responsible for rebalancing their 401(k). Not rebalancing leaves them facing a huge amount of risk. According to an article entitled "Too Much of a Good Thing," in the May issue of Kiplinger's Magazine, an account balance of $200,000 in insurer Marsh & McLennan before their bid-rigging allegations would be worth $132,000 today. That's a 34% DECREASE! Nobody should have to go through that!
The point of all this is the importance of having a balanced approach when saving for retirement. Don't fall in love with your company's stock. It could end up being a fatal mistake for your retirement plans!
Tags: Retirement Planning, 401(k), Employer Stock