Checking Under the Hood 

How to Perform a Six-Step Maintenance Checkup on Your Retirement Plan 

ADAPTED FROM EPIC RETIREMENT SERVICES 

1. Review Your Goals and Plans: Each year you should ask yourself if you’re on track to reach your retirement goals. Part of that process is imagining (in detail) what you would like to be doing during that stage of your life. Are your goals and plans realistic? Has your thinking changed at all? The American Savings Education Council (asec.org) has a wealth of resources to help you review and adjust your goals and plans as needed, and help you determine how much money you need to save for retirement.
2. Maximize Your Contributions: If you’re not contributing the maximum possible to your plan, increase your contributions by at least 1% each year, with a general goal of eventually reaching around 15% of your salary. Try to contribute at least enough right now to get the full employer match (if offered). It’s one thing to read this and say “yes, I can definitely increase by 1%.” But it’s only going to happen if you log into your account on your recordkeeper’s website right now and make the change!
3. Review Your Investment Strategy: Given all the market turmoil over the past few years, including inflation and economic events beyond our control, it’s smart to ask yourself each year if your asset allocation is still appropriate. Or, if your tolerance for risk has fundamentally changed. Your plan recordkeeper likely has a risk tolerance assessment exercise you can access on their website. In addition, consider working with a financial advisor to help you determine if your investment strategy is in sync with your current personal situation.
4. Rebalance: Rebalancing is the process of adjusting your portfolio’s investments so they match your original allocation. For example, due to ongoing market volatility, your portfolio may have drifted toward either a more aggressive or conservative allocation than you are comfortable with. Rebalancing keeps your portfolio risk within your tolerance limits.
5. Check Beneficiaries: Your spouse is automatically the primary beneficiary of your 401k plan. But, if you are divorced, widowed, or remarried, you should review your beneficiary designations to make sure the correct person is named. If you are married and want to name someone else (such as a child) as your primary beneficiary, your spouse needs to sign a waiver of rights to your 401(k) benefits.
6. Check on Retirement Plan Changes: Does your retirement plan offer any new plan features, tools, or resources? What can you do to take advantage of these opportunities? Also, be sure you have a copy of the Summary Plan Description for your plan (available for free from Human Resources). The Summary Plan Description defines, in plain language, how your plan works and what its features are.

Questions on your 401(k)? Reach out to the team at Heartland Trust. We’ll be happy to go over your retirement plan and its features with you, even if it’s not at Heartland Trust.