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Ensuring Your 401(k) Success
Why You Need to Check Your 401(k)
The 401(k) plan is the largest asset many investors own, accounting for 34.1% of their total net worth, according to the U.S. Census Bureau. Regularly checking your 401(k) account can help you stay on top of your investments and make sure that your money is working for you in the best way possible.
What Is a 401(k)?
A 401(k) is a type of retirement savings plan offered by many employers to their employees. It is a tax-advantaged savings plan that allows employees to set aside money from their paycheck on a pre-tax or after-tax (Roth) basis into an individual account established in their name. The money in the account is invested and grows over time, and the employee can use the money in the account during their retirement years.
Why Is It Important to Check Your 401(k)?
It is important to check your 401(k) regularly because it is the primary way many save for retirement. Investing in a 401(k) allows you to take advantage of tax-deferred growth, meaning you won’t pay taxes on any earnings or contributions until you withdraw the funds. Most employers will provide online access to your 401(k) account, where you can check the performance of your investments and make adjustments as necessary.
How Often Do You Need to Check Your 401(k)?
It is generally recommended to check your 401(k) account at least once a quarter or four times a year. This allows you to keep an eye on your account balance, investment holdings, contributions, and performance and make any necessary adjustments to your investment strategy. However, some experts recommend that you check your account monthly or even more frequently, especially if you are nearing retirement or making significant changes to your investment strategy.
What If You Have Multiple 401(k) Accounts?
If you have multiple 401(k) accounts, it is important to keep track of each one. Empower is a financial management tool that allows you to track all of your financial accounts, including 401(k)s, in one place. By linking your 401(k) account to Empower, you can view your account balance, investment holdings, contributions, and performance, as well as get a holistic view of your overall financial situation.
Can’t Find Your 401(k) Online?
If you are unable to find your 401(k) account balance online, checking your most recent statement can be a useful option. A 401(k) statement is a document that outlines the details of your account, including your balance, contributions, investments, and any fees or expenses associated with the plan. Your 401k may also use an online portal to access your portfolio, keep track of changes in investments, and look over any fees associated with the plan.
The Bottom Line on Checking Your 401(k)
You’ve worked hard and saved for the future, so it’s important that you stay on top of your 401(k) investment. Checking in with your 401(k) occasionally can help ensure that you’re getting the most out of it. Simple steps like reviewing quarterly statements, rebalancing regularly, maintaining the right mix of investments, and autopilot investing can help you keep tabs on how your retirement funds are doing without having to focus on it all the time.
Conclusion
Checking your 401(k) regularly is an important step in tracking your retirement savings progress. By understanding your account balance, investment holdings, contributions, and performance, you can make informed decisions about your investment strategy and ensure that your money is working for you in the best way possible. Whether you have one 401(k) account or multiple accounts, it is important to keep track of each one and make adjustments as needed.
FAQs
Q: Why is it important to check my 401(k)?
A: It is important to check your 401(k) regularly because it is the primary way many save for retirement, and investing in a 401(k) allows you to take advantage of tax-deferred growth.
Q: How often do I need to check my 401(k)?
A: It is generally recommended to check your 401(k) account at least once a quarter or four times a year, but some experts recommend checking monthly or even more frequently.
Q: What if I have multiple 401(k) accounts?
A: If you have multiple 401(k) accounts, it is important to keep track of each one. Empower is a financial management tool that allows you to track all of your financial accounts, including 401(k)s, in one place.
Q: Can’t find my 401(k) online?
A: If you are unable to find your 401(k) account balance online, checking your most recent statement can be a useful option. You can also contact your plan provider’s customer service for assistance.
Author: www.goodfinancialcents.com
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