The Common Mistakes You Might be Making With Your 401(k)

For Mark Roberts’ Use: If you’re contributing regularly to a 401(k) account, then you’re a bit ahead of the curve where retirement planning is concerned. Did you know that 35 percent of American workers don’t even have access to a 401(k)? So, we want to congratulate you on making a wise decision for your future.

At the same time, simply contributing to a 401(k) isn’t the end of the road, as far as planning goes. It’s just the beginning! Along the way, you’ll make many more decisions. And unfortunately, that means you’ll face the opportunity to make these common mistakes.

Contributing versus investing. Contributing to a 401(k) was a smart move. You’re saving for the future, and in a tax-advantaged way. But if you’re not actively investing that money within your account, by utilizing the included investment options, you’re missing out on a valuable opportunity.

You’re paying higher fees than necessary. Or, perhaps you are electing to invest in one or more of your account’s funds. Did you examine the fee structures before making those decisions? Many savers make the mistake of paying much higher fees than necessary, losing out on thousands of dollars over the life of their 401(k). Many lower-fee options exist, that still provide plenty of growth opportunity.

You’re losing money on orphaned accounts. These days, it is rare for a worker to stick with one company (and one retirement account) for the entire duration of their working years. If you’ve switched employers several times, you might be holding onto “orphaned” 401(k) accounts. You can’t contribute to them any longer, but you’re still paying fees on fund selections. In many cases, rolling those orphaned accounts into an Individual Retirement Account (IRA) is a money-saving move.

You’re saying no to free money. Does your employer offer matching contributions to your 401(k)? Do you know what that matching limit is? Are you taking advantage of it? Many people aren’t even sure if their company offers this option, or what the match limit is. Find out, and contribute at least that amount every year. If you aren’t making the match amount your absolute minimum contribution goal, then you’re saying no to free money for retirement.

If you suspect you might be making one or more of these common mistakes, or have other questions about your 401(k) account, please give us a call. We can help you review your options and choices, and make the selections that fit your budget and goals for the future.

By Mark Roberts|2019-02-23T17:51:25-06:00February 23rd, 2019|Retirement|0 Comments

About the Author: Mark Roberts

In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution. Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies. Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.” Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.

The Common Mistakes You Might be Making With Your 401(k)

The Common Mistakes You Might be Making With Your 401(k)

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About the Author: Mark Roberts