There is no time like the present to make the most of your 401(k) to meet your retirement savings goals. Implementing these strategies now can make a world of difference later down the road.
Fully Utilize Employer 401(k) Matching
There are many employers that offer 401(k) plans that will match employee contributions up to a certain percentage. And many participants don’t take full advantage of this incentive missing out on extra money because of it.
To make the most of your employer match, check to make sure your savings rate is the same as the match rate. If not, bump it up to equal your employer’s matching rate so you can receive the maximum amount of matching that you’re eligible for.
Increase 401(k) Savings Rate
Odds are you haven’t increased your savings rate since you opened your 401(k), which means it’s long overdue. Increasing your savings rate, even if just by a couple of numbers, will make a big difference down the road, adding up to a nice nest egg once it comes time to retire.
While some 401(k) plans have an automatic escalation feature that will automatically increase your contribution amount for you (up to a certain amount), it’s always a good idea to check and see how much you’re contributing. Doing so provides a great opportunity to adjust your savings rate as needed.
Optimize Your 401(k) Portfolio
Your investments should always align with your goals and risk tolerance. And, your risk tolerances will change throughout your life. It’s a good idea to assess your 401(k) annually; it’s a long term investment, so changes to your account should be based on things such as your age, and when you plan to retire.
With your Saveday 401(k), all you need to do is make sure your risk tolerance is set to where you feel comfortable, and our robo-advisor will do the rest. Since you’re only reviewing your risk tolerance, this should only have to be done on a yearly basis at most.
These strategies are a great way to help increase your 401(k) and ensure that you’re getting the most out of your investment. Nothing is more important than setting yourself up for success, so make sure you take the time to invest in your future, literally.
Photo by Jopwell from Pexels.