5 Things to Know About Your 401(k)


5 Things to Know About Your 401(k)

Posted by Infinite Wealth Advisors, LLC
7 years ago | July 23, 2017

iStock-589583420If you’re currently utilizing a 401(k) fund through your company, you’re making a wise choice. A 401(k) is one of the best retirement planning tools out there. But like any tool, it’s much more helpful if you’re using it correctly. So keep these five rules in mind as you continue to work and save for retirement, and you can reap the most benefit from your plan.

Learn your savings rate. How much are you depositing into your retirement account each payday? You might have set a savings rate years ago, perhaps when you first started working for your current employer. But over the years, your salary has probably changed. Your priorities have probably shifted, too, and retirement planning has become more important now. You need to reevaluate this savings rate every year, or at least every few years.

Consider automatic savings rate increases. Rather than taking the time to go down to the human resources department and make changes every year or two, you could just set up automatic savings rate increases. For example, you could request that your savings rate be bumped up by a percentage or two each year, until you’re making the maximum annual contribution.

Ask about your employer match. Does your employer offer matching funds for retirement? Many do, but this benefit is not well advertised. Try to contribute at least the match amount every year; otherwise you’re saying no to free money.

Stick with it. For various reasons, people are sometimes tempted to opt out of their employer’s 401(k) plan. But doing so could cost you important benefits, and you might be subject to a waiting period before you can rejoin the plan. Slow and steady is the key to retirement savings, so stick with it even if it feels like you’re not getting anywhere.

Pay attention to account statements. You probably receive regular updates from your retirement plan administrator. But those statements aren’t very exciting for most people. Resist the urge to let them pile up in a desk drawer, though. Actually open and read them, and keep yourself informed on the status of your retirement plan. If you need help with this part, give us a call. We can help you review all of those figures and graphs, and answer any other questions that you might have about retirement.

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