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Is it ever a good idea to hold company stock in a 401(k)?

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Is it ever a good idea to hold company stock in a 401(k)?
Workers will be better off limiting their employer stock holdings in their 401(k) account because of the risks involved, writes an expert on Morningstar. “At the portfolio level, heavily weighting single stock – any stock — has the potential to make that portfolio more volatile than one that's more diffuse,” the expert explains. “Moreover, because company stock ownership is much heavier among larger-cap stocks than smaller ones, it's much more likely that the investor who owns a heavy stake in the company also owns additional shares in that same company through any mutual funds in the portfolio.”

The coming bear market will be especially painful for the boomers
Older investors should brace for the coming bear market and downturn, as it would have a severe impact on their portfolio, writes a Forbes contributor. “When that next recession and bear market hit, it will take even longer to bounce back. The recovery will be even slower than this last one,” the expert explains. “My research shows that large amounts of debt slows recoveries. Very large amounts create flat economies. And we are approaching very large amounts in the U.S.”

Opinion: People need to use their home equity in retirement
Clients may have to tap their home equity in retirement to augment their income if their savings outside pension and 401(k) plans won’t be enough to support their lifestyle, writes an expert on MarketWatch. They have the option of selling their current home and move to a smaller house, or applying for a reverse mortgage or a state property tax deferral program, the expert says. “In point of fact, few homeowners use any of these options. They hold on to their home equity either as insurance against long-term care costs or to leave as a bequest.”

Here’s how many working Americans aren’t saving any money for retirement or emergencies at all
A survey by Bankrate.com has found that many workers have a hard time saving for short-term and long-term financial goals, with 21% of respondents not being able to set aside even a small portion of their earnings, according to this article on CNBC. When asked, the respondents said that expenses and inadequate job are among the factors that prevent them from funding their savings accounts. To catch up on savings, clients are advised to start as soon as they can, automate their contributions and sock away their bonus and other windfall.

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