1. Start Early & Take Advantage of a Company Match
Thanks to compounding interest, the earlier that you can invest in a 401(k) plan, the greater your return can be in the long-run. You earn interest not only in the funds you initially invested in your 401(k) plan but also on the interest it has already earned, allowing your savings to grow more rapidly. Devoting any amount to your 401(k) plan now, no matter how small, is going to be more beneficial than waiting another few years; and you can always increase your contribution at a later date. In addition, your employer may offer to match your investment up to a certain dollar amount or percentage of salary.  Take advantage by contributing as much as you can up to the match—your company is giving you free money to participate!
2. Tend to Your 401(k)
Many employers offer an option for employees to contribute to their 401(k) plan through an automatic payroll deduction.  While this is a valuable tool that can increase savings, it does not mean that the investment should run on autopilot. Consistently managed funds tend to produce higher returns.  Maintaining an open line of communication with your financial advisor can ensure that you are able to rebalance your portfolio as needed and take advantage of any opportunity that arises as the market fluctuates.
3. Diversify Your Investments
Perhaps the most important rule for investing in your 401(k) plan is to diversify your funds. Having a mix of assets in your portfolio allows you to proactively balance your risk.  The goal is to protect your balance in an economic shift or a decline in performance by building a foundational safety net. Your risk tolerance level will help to determine how you build your portfolio.  Are you aggressive (higher risk), conservative (lower risk) or somewhere in between? Your financial advisor can help identify the level with which you most closely align, helping you to allocate assets in a way that best represents your goals.
4. Rollover
If you move from one company to another, you will have several choices on how to manage the funds in your current 401(k) plan.  Do you move the funds into your new employers 401(k) plan, convert them into an IRA or do you cash out? There may be a minimum balance, but you may even be able to keep the funds at your old company; however, this may not always be the recommended approach. The best option for you can depend on the amount of your current investment as well as new investment options. It is always recommended discuss your options with your financial advisor to help you make an informed decision.
5. Stay Informed
While a financial advisor may help with the day-to-day management of your 401(k) plan, improving your financial knowledge will help you stay involved in the development of your investment strategy and short- and long-term goals. By staying educated and informed, you are in a better position to understand the performance of your investments and will ultimately feel more confident as you make decisions.
6. Manage Emotions
Decision making, particularly when it involves a significant financial investment, can be easily influenced by emotions. However, feeling optimistic when the market is up, or concerned when the market is down, does not mean that you need to take immediate action. Before making any changes, refer back to your initial goals. What short- and long-term goals did you set for your investment? What is your risk tolerance level? Are you happy with your current asset allocation or would you be more comfortable rebalancing? In addition, discussing market changes as well as a potential plan of action with your financial advisor can all help to ease your emotional investment.
7. Know When to Withdraw
The government has several rules regarding withdrawals from a 401(k) plan.  In general, you can begin accessing funds at age 59 ½.  There are special circumstances, but most withdrawals made before this age would typically be subject to a 10% early distribution penalty. Also, by age 70 ½, you must begin withdrawing a required minimum distribution (RMD). The amount of your RMD will vary and will depend on your account balance as well as an IRS table based on age. Your financial advisor can let you know if you qualify for any special circumstances or if you have any other opportunities to maximize your investment in your retirement years. Contact Howard Capital Management, Inc. By planning for your financial future now, you can make your retirement an exciting and smooth transition. Receive guidance and have your questions answered by contacting Howard Capital Management, Inc. (HCM) to find an advisor in your area.


This communication is issued by Howard Capital Management, Inc. It is for informational purposes and is not an official confirmation of terms. It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to. Opinions expressed are subject to change without notice. Howard Capital Management, Inc. may maintain long or short positions in the financial instruments referred to and may transact in them as principal or agent. Unless stated specifically otherwise, this is not a recommendation, offer or solicitation to buy or sell and any prices or quotations contained herein are indicative only. Our proprietary indicator, the HCM-BuyLine®, identified changes in the market trend. Buys and sells may or may not have occurred on the exact dates shown. These dates do not necessarily reflect transactions applied to every individual account. Also, certain products, custodians and portfolios may have a delay in execution. When the HCM-BuyLine® indicates a bull market, HCM then identifies the particular mutual funds, ETFs or individual stocks that we believe have the best return potentials in the current market from the universe of assets available in each given program and invests in them. When the HCM-BuyLine® indicates a bear market, HCM moves clients’ investments to less risky alternatives. Not every HCM-BuyLine® buy and sell will result in a profitable trade. There will be times when following the indicator results in a loss. However, there have been situations in the past in which HCM reduced clients’ exposure to equities during market downturns by following an HCM-BuyLine® signal, thereby preserving capital. Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Howard Capital Management), made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Therefore, no current or prospective client should assume that the future performance of any specific investment or investment strategy will be equal to past performance level or that it will match or outperform any particular benchmark.  Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Howard.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. To the extent permitted by law, Howard Capital Management, Inc. does not accept any liability arising from the use of this communication. A copy of Howard’s current written disclosure statement discussing our advisory services and fees are available on our website http://www.howardcm.com. LASS.102820 HCM.102820.50