Finance & Enjoyment Blog

401(k) Check-up: Ensure your 401(K) Is Healthy

With higher 401(k) contribution limits for 2015—$18,000 for under age 50 and $24,000 for those 50 and over—it might be tempting to focus on the quantity of money you’re diverting to your retirement funds. However, at KKB, P.C. we take a holistic approach to personal wealth management, and encourage you to assess the quality of your 401(k) plans quarterly but at minimum annually, or risk leaving money on the table. Here are four ways to conduct a 401(k) check-up right now:

1. Rebalance

It’s easy to get swept away with positive results when in a bull market. The reality is that the market will always go up and down, and your focus needs to be on comparing the 10-year rate of return against your year-to-date performance. Position sizes change over time based on how individual investments within your portfolio have performed. Therefore, you need to verify that your investment allocation aligns with your current risk tolerance and rebalance as necessary.

2. Invest

Talk with your financial advisor to evaluate any new investment opportunities that are available or that might be more appealing due to changes in tax law. For example, although some plans always allowed you to make after-tax contributions into your 401(k), new IRS regulations now make this a more attractive option for some investors. Get informed about all of your options.

3. Calculate

How are you tracking toward your retirement goals? Are you saving enough? Are your investments growing at a rate to achieve your retirement funding goal by the time you are ready to retire? It’s important to realistically assess your progress toward your retirement goals and make adjustments as necessary. Use any online retirement calculator to give you objective feedback. It is also a great strategy to try to maximize your contributions for the year. Calculate if you’re on track to meet the 2015 limits or need to adjust your deductions to get there by the end of the year.

4. Say, “Yes!”

Don’t turn down any free money your employer is offering. Be sure that you are maximizing your company’s 401(k) match and checking in with your company’s human resources department to get information about your plan. At the same time, you want to minimize the fees you are being charged. Be sure that you are focused on funds with low fees.

How to Use this Information

When dealing with the daily grind, it’s sometimes a challenge to keep your eyes on your retirement goals since it feels like eons before retirement. However, with a little proactive check-in on a quarterly basis, you can keep your eye on the prize to get a retirement that’s adequately funded. We are definitely available for personal wealth management consultations, and invite you to contact us online or give us a call at 303-815-1100 today!

What’s the first thing you will tackle with your 401(k) check-up?


Posted in Retirement and Exit Strategies »



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