What kind of 401(k) mistakes should you look out for? Nathan shares what you should know when it comes to your 401(k) and your financial plan.
Click on the timestamps below to jump to specific topics.
Having a 401(k) is a nice and relatively easy investment vehicle. You may get free money from an employer and there are a lot of positives. But what kind of mistakes can be made and how can you avoid them?
When you switch jobs, don’t leave your 401(k) behind. You can usually hold it there for some time, but most likely you’ll want to roll it over to an IRA. Talk to an advisor to help you do the rollover so that you have it invested the way you want and you have control over it.
Have you rebalanced your 401(k)? You want to do this about once a year to keep your targets on track. When it comes to automation, should you have a target date fund? Remember that these are not customized to you and your needs. Understand what a target date fund does and how it aligns with what you want. Let your advisor help you allocate your 401(k) as well.
If you are offered a financial advisor through your 401(k) plan, remember who the client is. Your employer is the real client, so it’s important to make sure your financial advisor looks at it for you. Make sure you take care of your investments to ensure they are working for you. With a 401(k), don’t assume the fees are minimal. The fees are built in. Understand what you’ve got and what your fees are. Take advantage of the contribution match, but ultimately, do your due diligence on the investment.
Listen to the entire episode or click on the timestamps below to skip ahead.
1:07 – June is here and summer trips are happening.
4:47 – Avoid 401(k) mistakes, like leaving one behind.
8:02 – Did you remember to rebalance?
8:55 – Should you use a target date fund?
11:55 – Should you use the 401(k) advisor?
14:00 – What are the hidden fees?
A Point Of Wisdom:
“In reality, you should be using your financial advisor to allocate your 401(k) also. Let your advisor set that thing up for you because that’s our job. We know what your goals are, we know what your plan is.“
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