401(k)s


3 Simple Steps to Make the Most of Your 401(k)

Step 1

Contribute at least enough to get the company match, and aim to kick in 15% of your salary (including the match), up to the annual max of $17,500, or $23,000 for people 50 and over. If that’s a stretch, raise the amount you contribute by one percentage point a year until you hit the target.

See Also: 10 Things You Must Know About 401(k)s

Step 2

Review your plan’s annual statement, which lists the investments, their performance and their annual expenses. Go to BrightScope.com to compare your plan’s fees with those of plans at similar-size companies, and talk to your plan manager if you don’t like what you see. Consider changing investments if another choice with lower expenses has comparable returns or better.

Step 3

Check your portfolio annually to see that your asset allocation hasn’t drifted off course, and rebalance if necessary. Some plans offer automatic rebalancing. In your twenties and early thirties, you should have at least 80% in stocks, with the rest in bonds. As you approach retirement, lighten up on stocks.

The payoff

You’ll have plenty of money for a secure retirement.

Editor's Picks From Kiplinger


You can get valuable updates from Kiplinger sent directly to your email. Simply enter your e-mail address and click "sign up".

More Sponsored Links


DISCUSS

Permission to post your comment is assumed when you submit it. The name you provide will be used to identify your post, and NOT your e-mail address. We reserve the right to excerpt or edit any posted comments for clarity, appropriateness, civility, and relevance to the topic.
View our full privacy policy


Advertisement
Get valuable updates from Kiplinger directly to your e-mail

Market Update

Advertisement

Featured Videos From Kiplinger