write-off (some plans, sixteen percent). I can contribute up to 16 percent, but 6 percent would have to be after-taxed dollars.

I like that the monies made in a 401(k) are tax-deferred.

I like the company’s 70 to 100 percent company match (it differs every year with my company) up to 6 percent of my contribution.

I like the option to move my money (every business day, if I wished) into my company’s stock or an Interest Income fund, Bond fund, Mutual fund or Index fund, at no cost.

I like the option to roll-over into an individual IRA account, twice a year, any after-tax and company matched dollars put into my 401(k), with no penalties or fees, even while I am still employed with the company. This allows me to select individual stocks and allows the dividends from those stocks to be rolled-over automatically into more shares of each company, also at no cost. (However, there are commission fees for the purchases of the stock. Dividend purchases only are commission-free. In my book 'The Stockopoly Plan' I explain how to purchase stocks commission free.)

I like that the company’s dividends in my IRA (set up by monies from my 401(k) plan) are also tax-deferred and are 85% tax free.

I like knowing that when my retirement day arrives, I’ll already have an individual IRA set up to move the rest of the 401(k) monies into, with twelve stocks already chosen, owned and proven to provide reliable ever-increasing dividend income. (The companies owned all have a history of raising their dividends every year.)

I like the free 1% the company gives me, just for being in the 401(k) plan.

I like the option to borrow money from my 401(k) plan, pay a low interest rate on the loan and know that the interest rate I’m paying on the loan goes to me (if I were paying a credit card bill of $3,000.00 at 18%, I know I have the option to pay off the high interest credit card loan and pay only 6% interest (to myself) on the $3000.00 loan from my 401(k).

I like knowing that when I move the rest of my 401(k) monies into my IRA when I retire, I’ll know about how much income I can reasonably expect in dividend income four times a month, twelve months a year (all twelve stocks have staggered dividend pay-out dates, providing cash dividends every week of the year).

The companies chosen in my IRA, with their history of raising dividends every year, will provide the comfortable, worry-free income which I believe investing should be all about.

My advice on 401(k) plans is to talk to an expert from the firm your 401(k) monies are with and find out what options are available to you and/or what your company allows. My point was simply to inform you that you may not be restricted to just putting your money into a Mutual fund or your company’s stock. You can transfer monies from your 401(k) to an individual IRA (Tradition, Roll-Over or Roth), at no fee and build your own Mutual fund. (I have been doing this in my 401(k) plan for years while still employed with my company.) If those companies you choose in your IRA have a dividend reinvestment plan you can request to have the dividends reinvested back into the stock each quarter. And this would be done for you, commission-free.

For more info on 'The Stockopoly Plan'
visit www.thestockopolyplan.com

Charles M. O’Melia is an individual investor with almost 40 years of experience and passion for the stock market. Author of the book ‘The Stockopoly Plan’, soon to be released by American Book Publishing.

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