Fourth Quarter 401(k) Tips: Moves to Make Now

With the end of the year now in sight, there are 7 fourth quarter 401(k) tips that may help you maximize your account performance. 

Don’t just sit back and leave your retirement future to chance. Take a moment to read the article below and then take action before the end of the year! 

#1 Review Your Retirement Plan 

fourth quarter 401(k) tips

Where are you in relation to your retirement savings goals this year? Take the time to review your plan and see what adjustments you need to make to end the year strong. 

If you are on track, see if you can contribute a little more or, better yet, max out the annual contributions.

If you aren’t, don’t beat yourself up. Can you contribute an additional 1-5% each paycheck for the rest of the year? Every little bit helps. 

Also, don’t forget, saving as much as you can in your 401(k) helps you take advantage of tax deductions next April.  

For those who do not have a retirement plan in place, get one created as soon as possible. Don’t wait until next year or some future date. Do it now.

#2 Contribute More 

fourth quarter 401(k) tips

The market volatility this year has some investors spooked. News headlines and the talking heads on TV only help to fuel investors’ fears. 

Not sure you should up contribution limits or try to max out 401(k) contributions? 

Here’s what you need to consider: When the market is down – you are getting more bang for your buck. 

Down markets provide an opportunity to accumulate more for your retirement future

Instead of panicking and wanting to move to cash, can you instead view this as the chance for you to increase your portfolio holdings?  

If you can’t max out the 401(k) contribution limit for your 401(k), at least contribute your employer’s match contribution. 

It’s like getting free money!

#3 Rebalance Your 401(k)

fourth quarter 401(k) tips

It’s not just what you save, but what you keep that may have a big impact on future account value and your ability to reach your retirement goals. 

This is why rebalancing is so important and may help boost 401(k) returns – even in a down market.

In fact, not regularly rebalancing has the potential to do real harm over time to your retirement account performance because unmanaged allocations may experience much larger losses in down markets and may miss the opportunity for growth during good markets. 

With recent market volatility and the down market, NOW is the time to rebalance. 

Doing so ensures you stay within your risk level and helps to protect against potential losses and stay on course with savings goals. 

Watch this video to learn more about why rebalancing is critical to your retirement future.

#4 Read Your 401(k) Statements

fourth quarter 401(k) tips

Opening and reviewing your statements helps you determine whether or not you’re on track to meet your financial goals. 

All too often, when 401(k) statements come in the mail each month, people toss them in the trash. Or maybe they try to read it, but don’t understand it. 

It’s important you become engaged with where you’re putting your hard-earned money. Open your statements and read them. 

If you don’t understand what you’re receiving, then reach out to an expert for help

Doing so may have a big impact on your overall returns and confidence about achieving your goals for retirement.

Check out the video below to see how to read a 401(k) statement.

#5 If You’re over 70, Don’t Forget Your Required Minimum Distributions

fourth quarter 401(k) tips

If you’re over 72 years old (or 70½ if you turned 70½ before January 1, 2020), you are required to take the required minimum distributions from your 401(k). 

While you can withdraw money anytime, you must withdraw your full required minimum distribution by December 31.

If you do not take the required minimum distributions, you’ll face serious tax penalties of 50% excise tax on the amount not withdrawn. 

#6 Roll Over Old 401(k)s

fourth quarter 401(k) tips

If you have left an old 401(k), or more than one, with a past employer, don’t just let it sit there! 

When you leave a 401(k) behind – aside from the fees incurred – your account remains subject to plan rules, and you will continue to have limited investment options. 

In addition, you may have overlapping funds that may no longer suit your risk tolerance. If you don’t touch your old 401(k) for over a decade, you may still be invested in funds that made sense when you were in that stage of your life – not now. 

We recommend you speak with a professional before deciding if you roll over an old 401(k) into your new employer’s retirement plan or into an IRA

Doing so will help you avoid irreversible and costly rollover mistakes.

Discover 4 reasons to move your old 401(k) sooner rather than later.

#7 Seek Help 

fourth quarter 401(k) tips

Getting help with your retirement plans and savings may have a bigger impact on your finances and tax situation than you may think. 

It doesn’t matter how far away or close to retirement you are or how much money you’ve saved. 

In fact, recent studies show how Professional Account Management may improve your annual 401(k) account performance by 3% or more.

Take a look below to see the potential of adding 3% more to your 401(k) over time.

fourth quarter 401(k) tips

See how much you may have at retirement, and how 3% may improve your 401(k) performance. Check out our retirement calculator.

If you want independent, professional account management to help grow and protect your 401(k), schedule a complimentary 15-minute 401(k) strategy session with one of our advisors.

Book a 401(k) Strategy Session

Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that are hurting your retirement account performance. 

We aim to achieve this goal by first looking at how much equity exposure someone has based on current market and economic trends (risk management) and, second, for the equity allocation, our goal is to be in what is working and out of what is not in terms of investment style.

With 401(k) Maneuver, you can go about your life doing what you love with confidence, knowing we are handling the changes for you. 

With 401(k) Maneuver, there’s no need for FaceTime meetings. 

And you don’t even have to move your account – you can keep it right where it is. 

Have questions or concerns about your 401(k) performance? Book a complimentary 15-minute 401(k) strategy session with one of our advisors. 

Book a 401(k) Strategy Session

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