Keep employer stock out of your 401(k)

Closeup of stock certificate

You already depend on your job for a paycheck, health insurance, life insurance, maybe even a pension. Don't put all of your retirement account eggs in that basket, too.

This is a rule we should all be following after the spectacular collapses of WorldCom, Inc. and Enron, Corp. wiped out the retirement savings of many of their employees.

Yet a survey by the Employee Benefit Research Institute found that employees with no restrictions on how much company stock they can own have an average of 25% of their 401(k) plans invested in those shares.

A quarter of workers over 60, the most vulnerable because they're closest to retirement, have more than half their retirement plan in company stock.

Don't buy those shares with your contributions.

If an employer matches your contributions with company stock, sell it and move your money to other investments at least twice year.

Click here to learn more about's 7 simple rules for a successful 401(k).

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