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Chapter 8. Using a 401(k) to Achieve You... > Developing an Investment Strategy - Pg. 87

Using a 401(k) to Achieve Your Other Financial Goals 87 Our Advice Roth IRA limits for 2002 allow you to contribute up to $3,000 of after-tax money to this non-deductible savings vehicle ($6,000 for a married couple). After five years, you can access the money for a first-time home pur- chase. Check out Chapter 9, " IRAs Versus 401(k)s--Which Is Better?" for more good news on what you can do with an IRA. Developing an Investment Strategy Every goal requires a separate investment strategy. Without going into too much detail here, it's very important to pick and then monitor your investments for your other financial goals. As you get closer to your goal, move money out of stocks and into safer investments, thereby ensuring that a quick change in the market's direction doesn't leave you holding the bag. For example, if the kids' education needs to be paid in 15 years, you can afford to invest your savings aggressively. Putting most of their college fund in growth-oriented investments such as large-, me- dium-, and small-company stock mutual funds probably makes a lot of sense. But as you get closer to needing the money (that is, reaching the goal), you should slow down and move into investments