Nearly two-thirds of Americans are confused about this simple way to save for retirement via CNBCMakeIt
If you can't define a 401 plan, you're not alone: Though it's one of the most common retirement savings vehicles, 63 percent of Americans don't understand exactly how it works.
Carrie Schwab-Pomerantz, financial adviser and president of the Charles Schwab Foundation, tells CNBC Make It that it's crucial for younger savers to be at least partly invested in a diversified equities portfolio:"You hear a lot about people being fearful of risk and being involved in the stock market. But when you under-represent equities, it's just as much risk."
"I love these funds for a few reasons," he continues."No. 1, they are simple. You don't need to pick stocks." Plus, they're"low cost," he says."It's a great investment, a great way to get started" saving for retirement. Note that, depending on where you work, the match sometimes comes with stipulations, like you may have to have been at the company for a certain amount of time.
If you don't have a 401, there are other ways to put your money to work. Consider alternate retirement savings accounts, such as a Roth IRA, traditional IRA, SEP IRA and/or a health savings account.
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