Whether you’re 25 or 55, you want your retirement account to essentially work on your behalf. But how do you really know if you’re getting the most out of your 401(k) and Roth options? Here are some effective ways to boost your retirement savings next year, as referenced from CNBC:
Watch for fishy activity
Have you ever reviewed your plan’s annual fee disclosures? If not, then now is a good time to do so. Should you choose to blow off your statements, you may never know about suspicious account activity.
Few things hamper 401(k) progress quite like a fraudulent withdrawal. Our advice? Pay attention to the transactions and double-check there isn’t unauthorized activity.
Increase your contribution
While we’ve touched on this before, it’s definitely worth mentioning again. You can contribute up to $18,500 to your 401(k) each calendar year. Best of all, these are tax-free dollars!
What’s even better is if your employer matches your contribution up to a certain amount. Here at Tactical Wealth, we strongly recommend saving enough to get your employer match. You’ll be amazed at how bumping up your contribution by just a percentage point or two will make such a significant difference.
Explore Roth options
As aforementioned, a traditional 401(k) allows you to save money on a pre-tax basis. Now let’s turn our attention to a Roth 401(k). In short, this type of account is funded with post-tax dollars and allows for tax-free withdrawals down the road.
Not sure which option is right for you? Many financial advisors today advise clients to put funds into both a traditional 401(k), as well as a Roth 401(k). One more thing to consider is that you may be able to convert some of the money in your traditional 401(k) to your Roth.
Know where your contributions are going
Here’s an especially important one. Far too many employees have a “set-it-and-forget-it” mindset when it comes to setting up their contributions. Little do they know that they have all of their deferrals going into high-risk or low-risk stocks and nothing in between.
As explained in the CNBC article, “Investing in diversified, target-date funds can help minimize risk and maximize return.” If you have additional questions about where to spread your retirement account contributions, don’t hesitate to contact the plan administrator.
Research high return investments
Watching the roller coaster that is the stock market can be exhausting. Now imagine this level of frustration over the course of your entire career. Is it really a wise decision to throw your retirement dollars at a few stocks and hope they perform well?
Part of what makes the Tactical Wealth Fixed Income one of the best high return investments is the risk mitigation factor. Because our strategic income fund is backed by pooled investments, we can prevent the risk of single loan defaults. Clients feel at ease knowing we have their financial safety and security in mind at all times.
Make the investment you deserve and see how the Fixed Income Fund can provide a much-needed boost to your retirement savings.