What Are Some Aggressive Plans to Invest in My 401(k)?


Quick Answer

An aggressive plan to invest in a 401(k) involves maxing out the employer match and investing up to 10% of income, reports Farnoosh Torabi for CBS News. The maximum investment limitations on 401(k) plans change each year.

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Full Answer

A 401(k) plan is a deferred compensation program approved by the Internal Revenue Service, according to Daniel Walker for the Houston Chronicle. Through this plan, an employee allocates a portion of his pre-tax wages to an investment account, earns interest, and then takes distributions during retirement. To be aggressive, it is important to invest early and understand the limitations established by the Internal Revenue Service each year, which are officially listed in Publication 500.

Investors can also be aggressive by completely rolling over their 401(k) plan when leaving a company, explains Dana Anspach for U.S. News & World Report. This type of balance transfer is not taxable. In addition, investors can be aggressive by diversifying investments. This approach allocates funds accordingly as prices change for a given security. Investors can also be aggressive by researching any company stock programs. Some employers allow for special tax treatment when purchasing a certain amount of company stock. Eventually, this stock is taxed at the more favorable capital gains rate, allowing for more income for the investor.

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