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6 ways to screw up your retirement plan

Mistake No. 5: too much company stock
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Mistake No. 5: Too much company stock

Financial advisers caution you should have no more than 10 percent of your retirement account in your employer's company stock. If you're concentrated in a single security, you get hit with a double whammy if your company hits hard times and you lose your job.

"Having company stock in a 401(k) plan is good for the company in a few ways, but it's a bad idea for the nonowner employees in many ways," Gordon says. "If you're thinking, 'What about the Facebook or Google employees who are now millionaires because of their stock?' don't confuse luck with skill. On the streets of this nation, there are many former employees of Enron, PanAm, WorldCom and others who also believed in their company's stock."

Sometimes, companies make their stock available to employees at a discount through stock options or other direct purchase programs, he says. If you're tempted, "you are probably best served by taking advantage of the discount and realizing the gain on the 'discount' as soon as (feasible)."


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