As we just passed the mid-way point for 2014 I thought that providing a list of to do’s regarding your 401k might be in order. In 2014 the maximum contribution is $17,500 plus $5,500 if you are 50 and over.
Increase your contribution – Have you increased your contribution percentage rate this year? If not, consider increasing it by a minimum of 1% now and another 1% in October. You’ll be amazed by how little it will impact your net paycheck. In the future, consider increasing your 401k contribution by any pay raise your receive in addition to making 1% increases on a regular basis.
Review your asset allocation – What is your overall asset allocation and is it as balanced as it should be? You should have a good diverse group of holdings including Large, Mid, Small, Foreign, and Emerging Market stocks, real estate, and a bond fund or two. A lot of 401k plan now offer automatic rebalancing which would be a good idea to do on an annual basis.
Manage your old 401k plans – Many people have 401k plans from prior employers that can either be consolidated into their current employers plan and or moved to an IRA. Now is a good time to start this project.
Look at your loans – Review any existing loans that you have against your 401k to make sure that the balance is being paid off as it should.
Audit your contributions – Compare your year to date contribution figures from your paystub to your 401k contributions to make sure that they match up.
Look at your choices – Review your fund lineup to see how your choices are doing against other options
Think about a Roth 401k – Consider using a Roth 401k for a portion of your contribution. After tax contributions grow tax-free which is always a good thing.
Remember that your 401k is most likely your single best place to accrue retirement funds. Pay attention to it!