Just one or two check-ins every year can help you stay on top of your 401(k)—and help you make progress toward your retirement savings goals.
Quick takeaways
If you’re like many people with a 401(k), you might set up your retirement account once—and call it a day. But checking in on your 401(k) regularly can help ensure you’re confidently managing your money—and continue to make progress on your retirement savings goals.
In as little as 30 minutes, you can review everything from address updates to new post-work goals. This list of questions helps you dig into the details and get started.
Part of your yearly 401(k) check-in is a retirement level set: What’s the age at which you want to stop working? Then, you can work backwards from there to figure out if you’re on track to reach those savings needs. Read these
How much you can put away per paycheck will vary depending on your income and other financial needs—and that’s OK. Here are two questions to consider no matter where you are in your financial journey:
- Do you contribute enough to receive the employer match, if offered? If not, you’re leaving money on the table.
- Are you able to boost your contributions by just 1% each year? Over time, that slight increase adds up.
Let’s say you make $30,000 a year and start retirement savings with 4%. Each year, you increase that rate just a little. Here’s how it adds up.
| Retirement savings contribution rate, year 1-11 | Annual income (assumes 3% yearly raise) | Total retirement savings per year |
|---|---|---|
| 4% | $30,000 | $1,200 |
| 5% | $30,900 | $1,545 |
| 6% | $31,827 | $1,910 |
| 7% | $32,752 | $2,293 |
| 8% | $33,735 | $2,699 |
| 9% | $34,747 | $3,127 |
| 10% | $35,789 | $3,579 |
| 11% | $36,863 | $4,055 |
| 12% | $37,969 | $4,556 |
| 13% | $39,108 | $5,084 |
| 14% | $40,281 | $5,639 |
| 15% | $41,489 | $6,223 |
The closer you get to retirement, the more you may want to accelerate savings, particularly if you had to pull back to balance other financial goals, such as paying for childcare or a mortgage. Once you reach age 50, you may be able to
Your
If you’re updating a current 401(k), it’s worth a few minutes to check in on old 401(k)s you may have from previous employers.
If you haven’t done anything with those savings, consider consolidating everything by rolling it into your current 401(k) or opening an individual retirement account. (If you don’t have the latter, you can open one.)
If you’ve experienced a life change—moving, getting married or divorced, welcoming a child—you’ll likely need to make updates to your 401(k) account. Also important: If you’ve moved, update your account information with your new address.
Next, ensure you know what happens to your 401(k) if something were to happen to you. Double-check and, if needed, update your beneficiaries—the person or people who will receive your retirement savings when you’re gone. (If you have retirement savings with Principal,
Get started today on your 401(k) catch-up.
