Is It Time for a Retirement Plan Checkup?

Getting an annual checkup from your doctor can be a great way to stay in good health, but when was the last time you gave your retirement plan account a checkup? Regular checkups can help ensure your financial health, too. Here are a few important items you can check to make sure your retirement account is set up for a healthy, happy future.

1) Review your account

Log in to your retirement plan account through your plan recordkeeper’s website. Your account website can give you up-to-date plan information, including your balance, personalized rate of return, and current saving and investing elections. You’ll also find useful tools to help you manage your finances.

2) Save enough to reach your goal

Most retirees will need to replace 70-85% of their pre-retirement income in order to maintain their standard of living in retirement. Your plan website has a calculator that will estimate your monthly income in retirement based on your current savings and contribution rate. Use the calculator to estimate what contribution amount will allow you to reach your retirement income goal and adjust if necessary.

3) Use your tax advantages

Contributing to your retirement plan account helps you reduce income taxes. With pretax savings, you defer income taxes on your retirement contributions until you take a withdrawal, lowering your taxable income now and delaying taxation until the future when you might fall into a lower tax bracket. Your plan may also allow Roth savings. With Roth contributions, you pay income taxes now but earn tax-free investment growth on qualified withdrawals. [1] If given the choice, consider which is the best tax advantage for you. You may even find a combination of both appealing.

4) Invest appropriately

Choose a diversified portfolio of investments that provides a level of risk that is appropriate for you based on your risk tolerance, retirement time horizon, and future goals. An aggressive portfolio, comprised primarily of stocks, may be most appropriate if you can tolerate risk and have a long time until retirement. A conservative portfolio, made up primarily of bond and cash investments, may be more appropriate for people nearing retirement.[2]

5) Add or update your beneficiary designations

A beneficiary is someone your savings will go to should you pass away. Designating a beneficiary ensures your savings go to the people you want. Review your beneficiary designations – especially after major life events like getting married, having children, or getting divorced – and update them if necessary.

We’re here to help

At BerganKDV, our Retirement Plan Solutions (RPS) team helps employers navigate the intricacies of maintaining a compliant retirement plan while maximizing participation and managing investment options. We have a focus on education and empowering our clients with informational resources and training so both employers and their employees feel confident they are getting the most out of their plans.

If you have questions about what our RPS team can do for your retirement plan, contact us today and one of our advisors would be happy to discuss it further. Let’s talk!

1 Roth withdrawals are qualified after age 59½ and five years after the first Roth contribution. 2 Investing involves risk. Using asset allocation as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss of principal due to changing market conditions.


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CATEGORIES: 401k & Retirement | Wealth Management
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