What is the 40 1K plan?

40 1k plan began in the early 1980s, which is a fund-wide endowment insurance system jointly established by employees and employers. It developed rapidly in the 1990s, gradually replacing the traditional social security system and becoming the first choice of many employers in the United States. Suitable for private profit-making companies. The 40 1K plan is the American pension.

Enterprises set up a special 40 1(k) account for employees, and employees take out a certain percentage of their salary and deposit it into the 40 1(k) account every month, and enterprises also deposit funds into the account according to a certain percentage. (such as provident fund)

On average, each 40 1(k) plan has more than 20 funds to choose from, including stock funds, bond funds, index funds and money funds. Employees choose investment varieties from the funds they provide. When you retire, you can choose to withdraw money in one lump sum or in installments.

Does the 40 1K plan look like a fixed investment? Let's make a comparison.

Although slightly different, the form is basically the same.

02 | Fixed investment can provide for the aged

40 1K plan can choose different fund types for investment. Over 2000, 70% were equity funds. After the bursting of the Internet bubble in 2000 and the financial crisis in 2008, the proportion of equity funds declined, but the total proportion of equity funds+foreign equity funds remained at 60%, and the scale of hybrid funds grew rapidly. 40 1K plan began to emphasize diversification of investment, but the ratio of bond funds to money funds has not been high.

Have you ever found that while many people are still worried about whether to make a fixed investment, hundreds of millions of people in lighthouse countries are already preparing their pensions with a fixed investment?

Since the main investment is the stock market, the bear market also has the risk of losing money. 40 1K plans to retire before quitting, so the bull market makes money and the bear market loses money. 200 1 and 2008, when the market is not good, it will also suffer huge losses. People in lighthouse countries will also vomit.

But in the long run, the return on equity investment is the highest. 1990 closed at 330 points, the latest point was 2832 points, with a compound growth rate of 8%. Especially 10, the long-term bull market per share has brought huge benefits to the 40 1K plan.

03 | Fixed investment is suitable for A shares

Because the 40 1K plan can't be voluntarily withdrawn, no matter the ups and downs of the bulls and bears, they all bear it silently. There is no liquidity limit for fixed investment, and the A-share bull market is short and fierce. When the bull market is high, the bubble is obvious, and the locked profits can be redeemed in time. A-share bear market lasts for a long time, and the bear market has enough time to open positions, so the fixed investment is completely suitable for A-share investment.