We’re thrilled to see that 401(k) fees at companies are trending downward. Lower fees mean more of your hard-earned money stays in your retirement savings, working for you. If you haven’t reviewed your 401(k) lately, now is a great time to do so. Here are a few steps to help you maximize your retirement funds:
- Check Your 401(k) Expense Ratios
It’s always a good idea to log into your 401(k) provider portal and reevaluate your fund choices. Pay attention to the expense ratios of your funds and see if there are cheaper options available, such as index funds or low-cost target date funds. Remember, changing funds within your 401(k) is not a taxable event. Don’t feel obligated to stick with an expensive fund just because you’ve held it for a long time and have significant gains. - Roll Over Your Old 401(k)s
If you’ve changed jobs, consider rolling over your old 401(k) accounts into an IRA. This move provides you with a wider range of investment options and helps you avoid unnecessary 401(k) fees. Companies like Capitalize offer free rollover assistance, making it easier for you to consolidate your retirement savings. - Increase Your Contributions
With 401(k) plans becoming more attractive due to lower fees and better fund availability, it’s an excellent time to increase your contributions. If you’re in a strong financial position and have extra savings, consider bumping up your 401(k) contribution percentage. 401(k) plans offer tax advantages and now, with lower fees, they are an even more powerful tool for building your retirement nest egg.
In a world where many costs seem to be rising, it’s refreshing to see positive changes in 401(k) fees. Taking these simple steps can help you take full advantage of the improvements and ensure your retirement savings grow more efficiently.
