Five Ways to Boost Your 401(k)
These tips will help increase your 401(k) account balance
A 401(k) is a great retirement plan for many participants, including those who want to save as much money as possible. Getting the most out of your 401(k) can sometimes be difficult, but there are numerous ways to increase your account balance.
Forbes magazine offers the following tips to help boost your 401(k):
1. Match what your employer offers. The recent economic downturn caused many companies to make cuts, and in some situations employers stopped matching worker contributions to 401(k) plans. Because the economy has rebounded over the past few years, more businesses have reinstated their 401(k) policies recently, and employees should take advantage.
Human resources professionals can help workers optimize the value of their 401(k) plans. Learn how much a company will contribute to a 401(k) plan and match this amount to boost your account balance.
2. Save your bonuses. Remember that holiday bonus you received? You can add that money to your 401(k) and watch it grow.
Every little bit helps when you’re trying to save for retirement, and bonuses that you receive over the course of a year can help you increase your 401(k) account balance quickly.
3. Reset your contribution rate in the middle of the year. There is usually an open enrollment period in which you can determine how much of your pay to contribute to your 401(k). However, many employers allow workers to change their contribution amounts midyear, and depending on the contribution rate, employees should evaluate the benefits of making modifications.
Company policies may change, and employees who are open to altering their contribution rates can make the most of their 401(k) plans.
4. Consolidate accounts. If you have more than one 401(k), you should consider the benefits of consolidating accounts. This option allows you to roll over an old 401(k) into your current employer’s plan or an IRA, which can help you save more money if low-fee investment choices are available.
In addition, those who consolidate 401(k) accounts can easily monitor a single balance. Often finances can get confusing, and having one 401(k) account can be much more manageable.
5. Focus on your options. Be an informed 401(k) account holder. There are many investment options available, and conducting research can help those with 401(k) accounts make the best long-term investments.
Creating an account strategy also is helpful. As 401(k) plans continue to evolve, those who devote the necessary time and resources to managing their account balances could reap the rewards of a successful strategy for years to come.