Tracking your 401K investments passively yet intuitively

Tracking your 401(k) investments might be dull. Often, your company selects the brokers you can use. This can lead to old-school interfaces and limited digital capabilities. This makes it less attractive for you to periodically check your investment. Besides, there is limited additional information being offered by the brokers. Instead, you can decide to use a third-party stocks tracker that can complement your traditional broker.

What is 401(k) investing?

In the United States, investing through 401(k) schemes is common as it offers employees a tax-deferred way of investing. Lots of people speak of “maxing out their 401k” as it offers them the most optimal tax possible, as it lowers their taxable income.

Additional benefits provided by employers

Next to your pre-tax investments, employers often also contribute to your 401(k) investments. For example, some companies match a dollar-for-dollar for up to 5% of your taxable income. This makes it highly attractive to allocate that 5% to your 401 and save up for retirement.

Downsides

There are some downsides to address. For example, you are not allowed to withdraw any funds before you turn sixty years old. However, it is possible to do it by paying a penalty. In most cases, the penalty is the income tax that you should have paid. On the other hand, when your employer matches it, you can still make a considerable profit over investing it by yourself. Investing through a 401 is therefore considered a no-brainer for many Americans working for an employer.

Selecting your investments

The major difference compared to other countries that offer incentives to save money for your pension, is the option to select stocks yourself. By selecting stocks yourself, you can adjust where needed and also choose your risk appetite. Naturally, this can also come with more risks which can turn into an unfavorable scenario. Therefore it is recommended to invest in diversified assets such as MSCi World, Vanguard World, and the S&P500. Besides a solid base of these stocks, you can select riskier investments to grow your holdings faster. This is a strategy that is typically referred to as a core-satellite strategy.

Tracking your holdings

Once you have purchased the holdings through your company’s preferred broker, you can reflect the purchases into your stock tracker of choice. In this application, you can have real-time insight into the stock prices, including news. This makes it possible for you to more accurately track the investments in your portfolio, and be on top of things. Of course, this does not mean that you need to make a purchase. However, it does help to understand where you are and see if you are on track. You can also cluster your holdings to reflect your investment strategy. For example, you can combine your core and satellite stocks, dividend and growth stocks, etc. This allows you to track the growth of the holdings and helps you to benchmark them against each other to adjust where needed.

Learn more about stock tracking

Want to learn more about stocks tracker technology and parties that offer it? Delta is a leading application in the field and offers intuitive functionality such as push notifications based on alerts, news related to your holdings, and potential integration with cryptocurrency (wallets). You can visit their website to learn more: https://delta.app/en.