The backpacks have been filled and pencils have been sharpened: it’s time for school to start! As students have the supplies they need to be successful in the classroom, now is a great time to give your retirement plan the “supplies” it needs to work even harder than you do:
- Review Your Contributions: Ensure you’re contributing the maximum you can for the year. If you haven’t already, consider boosting your contributions, especially if you received a raise or bonus. Start with a goal to save enough to get the full employer match (if available), and gradually increase your savings rate over time. Don’t forget to turn on automatic increase of your contributions annually to build assets in your retirement plan.
- Reassess Your Investment Mix: Confirm your investments align with your risk tolerance and time horizon. Meet with a Francis planner to make sure your portfolio is well-diversified across different asset classes. If you’re using a target date fund, make sure it’s still aligned with your retirement timeline.
- Evaluate Roth vs. Traditional Contributions: Consider whether Roth 401(k) contributions (after-tax) make sense compared to traditional 401(k) (pre-tax) contributions based on your timeframe until retirement and your tax situation. Your Francis planner can help you determine which option makes the most sense for you.
- Update Beneficiaries: Make sure your beneficiary designations are up-to-date, especially after major life changes (marriage, divorce, children). Many plans allow you the opportunity to designate contingent (secondary) beneficiaries as well.
- Consolidate Old 401(k)s: If you have old 401(k) accounts from previous employers, it makes sense to roll them into your current plan or an IRA to simplify management. Contact the recordkeeper for your current retirement plan to receive the proper forms to begin the process.
Remember, you have a copilot to help you make better money decisions! Reach out to the financial planners at Francis to make sure you’re stocked up for retirement. Visit francisway.com to get started.
