Take Your Retirement Plan to the Next Level

Take your retirement investments off autopilot, and customize them to your needs.

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One of the pitfalls of retirement planning is the “set it and forget it” mindset. Many people have a 401(k) through their employer and contributions are automatically deducted from each paycheck, so they assume that’s all they need to do. Unfortunately, this isn’t always the case. While it’s a good first step, just setting it and forgetting it can cost you thousands – or even hundreds of thousands – of dollars over your lifetime.

Jeff Rose
Jeff Rose
While you don’t need to (and you shouldn’t) obsess about every change in the stock market, you do need to pay some attention to what you’re doing with your retirement. Here are some ways to take your retirement planning to the next level:

Boost your retirement contributions. Many of us set up an automatic contribution from our paychecks when we can, and then let it go. How many raises have you had since you set up your automatic contribution? Perhaps you have found another way to make money or paid off debt and now have additional money coming in. If you have a little more discretionary income, you should boost your retirement contributions.

If your employer offers a match, make sure you are at least getting the maximum available. Even if all you do is increase your monthly contribution by $100, make that move. Chances are you aren’t saving enough.

Go beyond your employer’s plan. Don’t settle for your employer’s plan. Compare it to other options. If the plan is bad, max out your match, and then look into other retirement accounts such as low-cost IRAs. If your employer’s plan is particularly lousy, consider rolling the whole thing into an IRA that you can manage on your own.

In recent years, it’s come to light that many 401(k) plans charge outrageous fees. You could be losing some of your returns to these fees.

Use new investment tools. There are a number of new investment tools you can use to take your retirement planning to the next level. For example, Personal Capital is a free tool that allows you to automatically track your portfolio including your retirement accounts. You can get an idea of your total asset allocation, and take action when you need to make adjustments.

There’s also a 401(k) analyzer that will tell you exactly how much you’re losing to fees. Armed with this information, you can shop around for a better retirement account that allows you to keep more of your own money.

Other new online investment tools include low-cost portfolio management help through sites like Betterment, FutureAdvisor and Jemstep. You can also use the AARP Social Security Calculator to get an idea of when you should plan to start taking your benefits. A number of other retirement and investment calculators are available to help you chart your future course.

Don’t blindly accept the investment strategy your employer has selected for you by default. Take a look at where you stand, and then take your retirement planning to the next level.

Jeff Rose is a certified financial planner and U.S. combat veteran. He blogs at Good Financial Cents and Soldier of Finance.