401(k) – What You Need-to-Know for Retirement
1. Make sure you are saving enough for retirement (if you need to calculate that number, refer to your enrollment workbook or discuss with the 401(k) plan advisor or your own financial advisor). If you would seriously like to retire someday, you need to save enough during your working years & have it grow over time (you can’t retire if you don’t have enough money). Statistics show that a majority of Americans have not saved enough for retirement even as they reach age 50 (scary!).
2. Make sure you are using the proper asset allocation for your investments taking into account your age, risk tolerance, time frame, goal, etc. (if you have not completed a risk tolerance questionnaire or do not understand why this is important, ask your 401(k) plan advisor or your own financial advisor) – you do not want to run out of money or not save enough because you took too much or too little risk during your investing years.
3. Make sure you are reviewing all of your investments regularly with a qualified financial advisor. This should be done at a minimum annually, preferably semi-annually or quarterly. It’s just like taking your car in for regular maintenance – you wouldn’t expect your car to keep running if you didn’t get the oil changed, have it inspected, checked the brakes, etc. You should expect no less of your 401(k) plan and/or other investments – they need to be checked at regular intervals.
4. Please stop listening to the media re: what is going on in the financial markets – their job is to get ratings/sell newspapers and/or magazines, so they like to focus on the negative and sensationalize things that may not be really as important as they’d like you to think that they are. Talk to a qualified financial advisor to find out what is really happening in the world’s financial markets. If your financial “advisor” jumps at every negative headline/story out there, it may be time to find a professional advisor who keeps calm and thinks rationally.
5. Make sure you call and/or email your financial advisor if you have any questions re: your retirement and/or 401(k) plan. Don’t forget: it never hurts to get a 2nd opinion from another qualified financial advisor/planner re: your financial situation. You owe it to your older self to make sure your retirement is on the right track.
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