Knowing how to check your 401k is essential for anyone planning for retirement. Your 401k investment is a significant portion of your retirement savings, and monitoring its performance regularly can make a significant impact on your financial future.
This article will provide you with a comprehensive guide on how to check your 401k. We’ll cover everything from understanding what a 401k is to accessing your account balance and reviewing your investment performance.
II. Start with the basics
A 401k is a retirement savings plan sponsored by employers that allows employees to contribute a portion of their income to an investment account. 401k contributions are made pre-tax, which means your taxable income is reduced, lowering your income taxes. The money you contribute to your 401k account grows tax-free, and you don’t pay taxes on your investment earnings until you withdraw the money in retirement.
There are various types of 401k plans, including traditional 401k, Roth 401k, safe harbor 401k, and solo 401k. Your employer determines which type of plan they offer their employees.
III. Determine your plan provider
Your plan provider is the financial institution that manages and administers your 401k plan. To determine your plan provider, check your enrollment paperwork, paycheck stubs or contact your human resources department.
If you are still unable to determine your plan provider, go to the Department of Labor’s website and look up your company’s Form 5500. The form will contain information about your company’s 401k plan, including the plan provider.
IV. Visit the plan provider’s website
Most plan providers offer online access, allowing you to manage your account from anywhere. Log in to your account on your plan provider’s website to access your account balance, review your investments, and adjust your contributions.
If you are new to your plan provider’s website, follow the step-by-step guide or watch a video tutorial to help you navigate the site. Once in your account, locate the dashboard, where you can view your 401k balance, investment performance, and contribution history.
From the dashboard, you can also adjust your contribution amounts, select new investment options, or change the allocation of your investments.
V. Phone your plan provider
If you prefer to speak to someone directly, call your plan provider’s customer service number. They will assist you in accessing your account balance, reviewing your investments, and adjusting your contributions.
Be prepared to verify your identity when calling. Plan providers take security seriously, and you don’t want anyone to access your account information without your permission.
VI. Review your statement
Each quarter, you should receive a 401k statement in the mail or electronically. Your statement will include your account balance, contributions, and investment performance.
When reviewing your statement, make sure the information is accurate, and the transactions listed are correct. If you find any errors, notify your plan provider immediately.
Your statement is also an opportunity to review your investment allocation. Your investments should be balanced according to your risk tolerance and retirement goals. If you need to make changes to your investments, take the necessary steps by logging into your account or calling your plan provider.
VII. Check your investment performance
Your 401k’s investment performance is crucial to your long-term financial goals. Your investments should be earning returns that are in line with your retirement objectives.
To monitor your 401k investment performance, log into your account or review your statement. Check the rates of return for each investment option available to you. Consider how your investment rate of return compares to the average rate of return of similar investments.
If you find your investments are not performing as well as you would like, consider reallocating your investments. Consult with a financial advisor to help you make the best investment decisions for your retirement goals.
VIII. Verify your beneficiary information
It’s essential to keep your beneficiary information up-to-date. Beneficiaries are the people who will receive your 401k savings if you were to pass away unexpectedly.
To update your beneficiary information, log into your account on your plan provider’s website or call customer service. Ensure that your beneficiaries’ names, addresses, and contact information are accurate.
In conclusion, regularly checking your 401k is essential for proper retirement planning. Start by determining your plan provider, visiting their website, calling customer service, reviewing your statement, checking your investment performance, and verifying your beneficiary information.
Consult with a financial advisor to help you calculate your retirement savings goals and make optimal investment decisions.