3 Quick Tips For Staying Connected To Your 401(k)

Adam Wren for Forbes writes: You’ve had a 401(k) for years, your money goes in each month, the statements arrive each quarter, and you don’t think about it much. You’re not alone.  Complacency is common, but there are tactics within your reach to stay engaged and be sure your money is optimized amid today’s dynamic financial environment. Consider these different approaches to avoid the status quo and get the most out of your investments.

Just Three Minutes a Year

Make a note to check in with your financial advisor at least once a year about your allocations. Add a reminder to your work and home calendars, or set an annual recurring reminder in your smartphone. You can also associate it with an annual event like Tax Day. It’s of course best to meet more frequently and in person. But if you can’t seem to follow through on face-to-face meetings, try this quick trick: Log on to your 401(k) site and do a screen grab or a copy and paste of your current investment allocations, as well as other potential allocations available to you. Email your advisor and ask him or her to review your setup and make any recommended adjustments to align with the current economic climate.

Take That Raise and Sock It

For many Americans, a raise translates to more discretionary income. But rather than increasing your spending, you could consider diverting all or some of your annual raises directly to your 401(k). Many plans offer an automatic deduction from each paycheck. If you feel like you need some of the money to cover expenses, consider putting away a small portion per raise into your account. Even 1 percent helps.

Consolidate

With the average American holding 10.8 jobs between the ages of 18 and 42, 401(k)s can pile up like old business cards. A strategy for keeping closer tabs on the status of your investments is to keep them clean and simple, so that you can monitor and manage your money more easily. One way to do this is to rollover 401(k)s from old jobs into your latest 401(k). That way, you only have to worry about keeping tabs on one password and one statement.

Whatever works best for you, the most important thing is to consider all strategies and take a proactive, informed approach to your 401(k).