Optimal use of your plan requires putting time and effort into managing your account and making smart decisions with respect to your investment mix, how much you contribute, and whether you invest pre-tax or post-tax dollars. Your decisions become increasingly important as your account balance grows and you move closer to retirement.

It’s important to rebalance your account periodically to maintain your chosen asset allocation. If your plan offers automatic rebalancing, you can take advantage of the service. With a do-it-yourself approach, you run the risk of forgetting or making errors.

Most investment portfolios require modification from time to time. As retirement approaches, people commonly reduce their portfolio’s allocation in equities and increase the percentage in fixed income and guaranteed return products.* This reflects changes in their primary financial objective, which transitions from growth to asset preservation and income generation. 

Most 401(k) participants always want to know where they stand in relationship to their retirement savings goals. Realizing that you’re on target brings peace of mind. Seeing that you’re behind can lead to action, such as making catch-up contributions starting at 50.

Account management gets more complicated if and when your 401(k) nest egg needs to generate retirement income. Options exist within the plan and outside it, and each one has its own advantages and disadvantages. Many participants choose an IRA rollover because they feel it offers greater investment flexibility and more control. Participants are also increasingly turning to annuities either inside or outside the plan to get lifetime income guarantees.* 

Generally speaking, borrowing money from a 401(K) isn’t advisable because it’s a long-term investment that’s earmarked for retirement. Be careful to avoid the temptation to cash out of the plan and spend the money. Chances are you’ll not only face a big tax income bill and pay a big penalty tax, but you’ll also wish you still had the money when you’re looking for retirement income. 

Let Johnson Brunetti guide you in optimizing your 401(k). Our holistic approach to planning allows us to see the plan within the context of your total financial picture and top financial goals. We can offer recommendations based on our knowledge of your needs as well as our experience in helping thousands of clients who rely on their plan for accumulating savings and generating retirement income.

We’re here to help you make well-informed decisions throughout the life of your plan. You can count on our professional guidance in monitoring performance, making investment choices, balancing your allocations, and generating tax-efficient retirement income. We’ll teach you to focus and streamline your account management efforts so you can save time and improve performance. As you approach retirement, we’ll guide you in reviewing all the options you have for using your 401(k) nest egg to generate tax-efficient income. 

Together, we’ll look at the pros and cons of Roth IRA conversions, IRA roll-overs, and annuities for preserving and creating more retirement wealth. We can help make these and other transactions easier using our expertise.