A Simple Six-Step Checkup for Your Retirement Plan
Is your 401(k) plan acting up when the market gets rough? Are you saving enough? Is your investment strategy working well? Doing a yearly checkup on your 401(k) can help you stay on track for retirement. Here’s a quick six-step checkup you can do in just a couple of hours.
1. Review Your Goals and Plans
Each year, take a moment to think about your retirement goals. Picture what you want your retirement to look like. Are your goals realistic? Have your plans changed? For example, if you planned to travel a lot but now prefer a quieter lifestyle, adjust your savings goals. Heartland Trust Company provides a wide range of services, resources, and planning tools to help you review and adjust your goals and determine how much you need to have saved.
2. Maximize Your Contributions
If you’re not contributing the maximum amount in your 401(k), try to increase your contributions by at least 1% each year. For example, if you’re saving 5%, increase it to 6% this year. Aim for about 15% of your salary. At the very least, contribute enough to get the full employer match (if available). Log into your account and make the change now! Retirement plans administered by Heartland Trust Company offer an auto increase feature on our Participant website to help you gradually boost your retirement savings. Check your plan’s website to see if this feature is available for you too.
3. Check Your Investment Strategy
With market ups and downs, it’s wise to review your asset allocation each year to determine if it’s still appropriate. Has your risk tolerance changed? For example, if you were okay with high-risk investments in your 30s but now prefer a more conservative approach in your 50s, adjust your investments accordingly. Your plan’s website likely has a risk tolerance tool. Consider talking to our wealth management team or retirement relationship managers at Heartland Trust Company to ensure your investment strategy fits your current personal situation.
4. Rebalance Your Portfolio
Rebalancing means adjusting your investments to match your original allocation goals. Market changes can shift your portfolio to be more aggressive or conservative than you want. For example, if your stocks have done well and now make up 70% of your portfolio instead of 60%, rebalancing will bring it back to your desired mix. This keeps your portfolio’s risk level where you want it. For plans administered by Heartland Trust Company, take advantage of the auto rebalance feature available on the participant website to easily maintain your desired investment mix and keep your portfolio’s risk level on track.
5. Update Your Beneficiaries
Your spouse is automatically the main beneficiary of your 401(k). If you’re divorced, widowed, or remarried, check your beneficiary designations to ensure the right person is named. For example, if you remarried and want to name your new spouse, update your designations. If you want to name someone else (like a child) as your main beneficiary, your spouse must sign a waiver.
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5. Update Your Beneficiaries
Your spouse is automatically the main beneficiary of your 401(k). If you’re divorced, widowed, or remarried, check your beneficiary designations to ensure the right person is named. For example, if you remarried and want to name your new spouse, update your designations. If you want to name someone else (like a child) as your main beneficiary, your spouse must sign a waiver.
