Improve your Experience Saving with a 401(k)

As you get older, you begin to realize that you wish you had done some things differently during your lifetime.  One major concern that we hear is that people wish they had planned for their retirement much earlier in life.  When you are young and busy building a career and family, the thought of retirement planning does not always make the top of the priority list.

The significance of establishing a plan when you are younger cannot be understated.   Many companies offer a 401(k) retirement plan and younger career professionals should take advantage of this and begin to plan for their retirement.

Here are some ways to improve your experience in saving with a 401(k) plan:

  1. Most employers are willing to pay for some retirement. Employees of all generations, including millennials, are feeling vulnerable about their long-term security.  The desire to be prepared and establish a plan is an important element to the employment choices and the options that are being offered.  Look at the entire package when being offered a position so that you can maximize your retirement savings.
  2. Take advantage of the investment options being offered. The options for your 401(k) plan being offered by your employer must be closely researched so that you understand what is available to grow your investments. Make sure that your choice of  portfolio is not too conservative as your time horizon may be decades long and being too conservative with your investments will not enable you to achieve the retirement savings that are necessary for a comfortable retirement.
  3. Be aware of the plan offerings. 401(k) plan providers usually have a default investment plan selection which very often may be to all bonds or a money market fund. If you neglect to choose a suitable portfolio, your 401(k) plan will default to this lower risk portfolio and therefore an expected lower return.  This is not advantageous for your long-term growth potential.
  4. Monitor your progress. If you have digital access to your 401(k) plan, monitor your plan and make sure that you continue to make the best choices for your individual plan. Pay attention to any changes being offered and research the new vehicles. Most companies will provide notification on when you can elect to make any changes to your plan and make sure that you elect to participate in any matching funds that your firm may offer.
  5. Ask Questions. Planning for retirement and choosing the correct options for you is a difficult task.  Make sure that you inquire about all of the options that are available and that you are participating to the fullest. Most companies will allow changes to your investment choices during a specific time frame. Make sure that you do not miss out on the opportunity to increase your savings for retirement.

Time has a way of sneaking up on you…..and by establishing a plan early (especially when your employer is offering one for you) will help you in the future.  Improve your experience by being aware of your options and provide the most that your 401(k) has to offer.  Your 85 year self will appreciate it!

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About Maureen Crimmins

Maureen Crimmins is co-founder of Crimmins Wealth Management and a fee-only independent financial advisor. Have a financial question? ASK MAUREEN

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