Where to put your 401K money?

I get asked all the time, "What funds should I pick for my 401K?". Before I give my answer, I ask a few questions.

1. Are you at least putting into/having withheld from your paycheck an amount that gets you 100% of the company match? If not you should be.
   
2. Do you have consumer debt? If you do, don't contribute more than what your company will match. You must get out of debt.
   
3. When was the last time you reviewed your retirement plan beneficiaries?
   

With answers to these 3 questions, I don't give "financial advise" I can only tell you what I do and my what your hearing from me is free. So here it is.

Diversification - To spread around. As the saying goes, money is like manure, spread it around and it helps things grow. Leave it in one pile and it stinks.

Most people will do well to pick / spread their retirement fund choices between 4 - 5 classes of mutual funds. I currently have 5 classes.

• Large Cap
• Small Cap
• Foreign
• S&P 500 index
• Growth & Income
  

I came across a free asset allocator calculator from cnn money that may help you pick your categories. The answers I gave returned this asset allocation. Not that far off my my current mix.



The most important thing is to get started and stick with it over a long period of time.