Don’t make maximizing your 401(k) a DIY project

Tanya Winch
Tanya Winch

There is something exhilarating about a challenge; something satisfying about being presented with a daunting task and working hard to complete it!  A hard job done well is simply fulfilling.  Over the Labor Day weekend you would have found me in a 104 degree garage re-painting 10 closet doors.  It was sweaty work and I did my share of grumbling, but that made it even more sublime in its completion.

However, there are some jobs that I just do not tackle.  With age, comes wisdom (so they say) and I am aware that I don’t have enough time in my week, month, or year to get even marginally good enough at some skilled tasks.  It is not worthwhile.  For instance, I don’t do my own taxes.  There are multiple rule changes and schedules and tax benefits and pitfalls that affect me.  It’s better for me to admit I need help than to get halfway through and belatedly realize I need decades to become anywhere close to proficient (or passionate) enough to really excel at tax prep. For that, I take advantage of Winch Financial’s excellent tax preparation services.

I feel the same way with my 401(k) investment choices.

Your 401(k) is the most important piece of wealth you have, second only to owning a home.

An alarming majority of 401(k) investors do not pay much attention to this hefty portion of their wealth.  Many set up their account and close their eyes.  That is simply short sighted.  If you are not thinking about it, it is now time to begin!  Six of the biggest questions to consider are:

  • How much are you funding your account?
  • What is your employer’s match?
  • Are you able to fund your 401(k) to the maximum – currently $18,000 in 2015 with an additional $6,000 catch-up contribution if you are 50 or older
  • What investment options are open to you / what investments are you actually utilizing within your account?
  • Do you know the fees you are paying in association with your plan?
  • Are you receiving help in deciding the best investments within your plan?

Just last evening, I heard a story of a young person who had been funding a 401(k) for three years and could not understand why there wasn’t much growth.  As it turns out, this person was new to the job market, the 401(k) world and investment vehicles.  They had mistakenly clicked to place all their funding in the Money Market fund option.

If you are smart enough to create wealth by funding a 401(k) account, do yourself an additional favor by giving one of your biggest pieces of wealth a little attention.  Seek some investment wisdom.  Look for a fiduciary investment advisor to help with some smart options.

One simple way to maximize your 401(k) is to take advantage of Winch Financial’s My Smartplan. With this low cost subscription service, you’ll receive allocation suggestions, market commentaries and alerts. It’s an easy way to make sure you’re staying on top of one of the most important investments you’ll ever make.

I’m confident in my painting ability and I love the way my new doors look, but there is no way I’m going to touch the foundation of my home. I leave that to the professionals. I feel the same way about the foundation of my financial future.

Call us today to make sure your financial house is in order. We’ll be glad to meet with you to review your retirement options and make sure your 401(k) is positioned to give you the best chance for success.