Minding Your Money: Don't Sleep on Your 401(k)

Millions of Americans have a 401(k) to save and invest for retirement, but many of us simply leave these accounts on auto pilot, rarely checking or making changes to them. Financial experts recommend taking a look at your 401(k) at least every few months in order to make sure it is earning and growing enough to support you when you retire.

Proper management of your 401(k) starts with your investment portfolio. For instance, 2019 was a banner year for the stock market and, in turn, for many 401(k)s, but those with poor investment options may have missed out on maximizing that market growth. "Just like everybody's got their own personality, everybody's got their own investment personality," says KTRH Money Man Pat Shinn with Heritage Asset Advisors. "So pick a mix of investments that fits the risk profile for you, not your co-worker."

Besides having the right investments, the other big key to your 401(k) is how much you contribute. "It's really simply a matter of contributing as much as you can for as long as you can," says Shinn. "For this year, the maximum salary deferral (to a 401(k)) for someone below age 50 is $19,500, and for anyone 50 and above you can add an extra $6,500 as a catch-up contribution."

If you don't think you're contributing enough right now, Shinn recommends gradually increasing your level over several years until you reach the contribution limit. "Take a look at whatever percentage of your salary you're putting in---say 10 percent---and move it up to 11, then the next year move it up to 12...we call it the one percent solution," he says.

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