*First National Community Bank’s blog does not constitute legal, tax, accounting, investment or other professional advice. Recipients should consult their professional advisors for advice.
While National 401(k) Day is celebrated every year on the Friday after Labor Day, we should take the time at least once a year to check in on our retirement nest egg. We have compiled the top three 401(k) tips you need to know about evaluating your 401(k) and retirement savings options to help ensure you are getting the most out of your 401(k) and are prepared for retirement.
Tip #1: Evaluate Your Workplace 401(k) Plan Performance
For many, taking advantage of a 401(k) plan through your workplace is commonplace, yet even though you’ve likely been contributing to your 401(k) account for years, you may not fully understand how the account works or how to take advantage of all the benefits your plan offers to maximize your savings.
It’s important to remember that 401(k)s are investment accounts. This means that like any investment, there is risk. You as the account holder should determine how much risk you are comfortable with and allocate your 401(k) funds accordingly. As you contribute to your 401(k), this money is invested into funds that you or your employer choose when setting up the accounts. These funds are typically a mix of mutual funds, stocks and bonds. The exact investment options vary based on who is managing your 401(k), but you’re usually able to choose which investment options you want to focus on, which ones you want to avoid, and which you want to try out and which (if any) options are under performing and in need of adjustment to better options.
Tip #2: Make Sure Your Plan Is Accurate & Up To Date
Each year can usher in life changes and with any life changing events such as marriage, divorce or the birth of a child, it is important to review your account for accuracy, specifically the address you have listed and beneficiary designation. This helps ensure that your updated information is current and will not cause any issues down the line if you change jobs and/or relocate. Checking for accuracy to ensure there was no human error is also important as information is often entered in manually on your enrollment forms or you may have inadvertently left off an extra number of your new address or transposed a number in the date of your spouse’s birth.
Tip #3: Consider Additional Retirement Savings Options
Having a sound retirement plan should be as individualized as you are. In addition to, or in lieu of, a 401(k), opening an Individual Retirement Account (IRA) is another way to set aside money for retirement. An (IRA) is a form of pension that provides tax advantages for retirement savings. It is a trust that holds investment assets purchased with a taxpayer's earned income for the taxpayer's eventual benefit in old age. At First National Community Bank, we offer Traditional IRAs, Roth IRAs and The Coverdell Education IRA to help achieve your retirement and educational needs and goals. To learn more about First National Community Bank’s retirement savings options, visit: https://fncbank.com/Personal-Banking/IRAs
National 401(k) Day can be a great reminder of how important planning ahead for retirement can be in making sure that you are able to retire comfortably. As your locally owned community bank of choice, the success of your financial future is top of mind. We offer Personal Checking Accounts, Money Market, Personal Savings Accounts, CDs, IRAs, Business Loans, Treasury Management Services, Mortgages, Personal Loans of all shapes and sizes and much more! To learn more about First National Community Bank’s financial solutions, contact us here.
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