Protect Your 401(k) Plan with Annual Reviews
Reviewing your 401(k) plan on an annual basis helps make sure your plan is on the proper course. Here are three steps to use when reviewing your 401(k) plan:
- Consider your goals — Keep your financial goals in mind as you review your 401(k) plan. Have you experienced life changes that affect your goals? Has your income or family situation changed? Do any of these changes require adjustments to your 401(k) plan?
- Consider your contributions — If your company offers matching contributions, one of the biggest mistakes you can make is not to contribute enough to take advantage of the full matching amount. As part of your review process, create a detailed annual budget and actively look for ways to contribute more in-come to your 401(k) plan. Or resolve to put any pay increases directly into your plan before you find ways to spend the additional money.
- Consider rebalancing — Most 401(k) plans have a wide variety of investment options, so you should be able to broadly diversify your holdings. Don’t invest too much in your company stock. Take a look at all of the plan’s investment options, reviewing their historical performance. Compare that to your investments and decide whether any changes are needed. There are no tax consequences to making investment changes within your 401(k) plan.
Please call if you’d like help reviewing your 401(k) plan.