As with any pension plan, to have a sound 401(k) it is important to seek reliable advice and avoid some of the pitfalls that many investors fall into. Below are two common mistakes that can really cost you:
- Not establishing a mandatory savings goal for each month of retirement.
Do you know what the maximum allowable 401(k) contribution is? It is easy to look up, or you can ask your financial advisor for the answer. Knowing this number will give you a better idea of how much you should aim to save each month. Do you have a matching plan from your employer? Talk to your advisor about how you can leverage that extra money for your monthly contributions.
- Not asking your advisor to review all allocations.
One of the best ways to determine how to allocate your assets to your 401(k) is to talk to your financial advisor about how aggressive you want to be. In most cases, investments tend to be more aggressive earlier on in the plan, and then become more moderate as you near retirement. Sometimes, online tools that many plans offer are a quick and effective way to decide how much you want to allocate. In other cases, working with your advisor directly in person is more helpful. The trick is determining what works best for you, and always asking your advisor for assistance if you are unsure.
If you have any concerns about your retirement strategy, please call Mooney Lyons at 1-847-382-2600, or visit us at mooneylyons.com.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
No strategy, including diversification and asset allocation, assures success or protects against loss