Money Matters: Give your 401k a checkup

September 8, 2017 01:30

Sponsored by NEFE

It's easy to put a 401k on autopilot. Once it's set up, you know that a certain amount from your check and a contribution from your employer are going into it each month, and you've chosen an option of how you'd like your balance invested. Studies show less than ten percent of 401k holders made any changes in the past year. But circumstances change over time, and it's worth reviewing your plan on a regular basis, to ensure you're you're investing in a way that makes the most sense for your life situation and that you'll be able to get the most out of it when you retire.

As Consumer Reports explains, it's important to look at the big picture. Has your income changed? Did you get married or have a child? Life changes may require retirement planning changes to match. Do you have room to increase your contributions? Experts say saving 15 percent is a goal, but putting at least the minimum contribution required to get the maximum match from your employer is key. Adjusting your asset mix may be helpful, depending on your age and your risk tolerance. It's also worth reviewing your fees to keep them to a minimum and take advantage of any bonus services, such as financial wellness programs.
To help your listeners/viewers/readers understand why it's important to review their 401k plan, interview financial planners in your area. They can explain how they recommend different mixes of investments depending on the age, risk aversion and financial circumstances of their clients, and how best to structure income and savings to get the most out of employer-based retirement vehicles.

Sponsored by the National Endowment for Financial Education
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Steve Pomeranz of On The Money Radio entered the 2016 NEFE/RTDNA awards contest with a series of reports about Exchange Traded Funds, and some of the risks investors in such funds could face.