What if my matching contribution is in company stock?
- How does a 401(k) plan work?
- How much can I contribute to my 401(k)?
- How does the money get invested?
- What's a matching contribution?
- How does vesting work?
- What if my matching contribution is in company stock?
- What if I need the money before I retire?
- What if I leave my job?
- When do I have to take the money out?
Many employers' matches come in the form of company stock - and free company stock is a heck of a lot better than nothing. However, in order to limit your risk, it's wise to move out of the stock and into more diversified investments as soon as possible. Experts recommend keeping no more than 5% to 10% of your total assets in the stock of your company. Just ask any former employee of Enron or Bear Stearns why that advice makes sense.
Consult your benefits administrator to find out your plan's rules for moving out of company stock.
