By Chris O’Shea*
Year-end 401(k) moves to make
The end of 2021 is coming. That means it’s time to address your 401(k). You want to make sure you’re getting the most value out of this retirement account. Here are some moves to make before 2022 arrives.
One of the best parts of a 401(k) is the employer match. Your employer will sometimes match 401(k) contributions, up to a certain point. It’s essentially free money. You want to make sure you’re taking advantage of this match. Set your contributions to the full matching amount before the year is over.
For 2021, the max 401(k) contribution is $19,500 if you’re 50 or younger; $26,000 if you’re 50 or older. The time is now to get as close to that max as possible because it will take some time for payroll to change your contributions.
Before the year ends, take some time to review your investment mix. As The Richmond Dispatch notes, you want to make sure you’re not paying too much in fees. If the fees don’t sit right with you, you might want to shift more of your portfolio to index funds. Index funds — unlike mutual funds — are passively managed, and that makes their fees lower.
Your 401(k) can be a good investment tool. It can be a great tool if you are taking full advantage of it. Act now to make sure you’re getting the most value. Don’t sit around and just hope for the best. Time goes by faster than you think.
*This guest article is from the “Your Money Blog” in Mid Oregon’s Digital Banking Credit Savvy resource. It is made possible by SavvyMoney. “Yearly Check-up” by Chris O’Shea was published in December 2021.
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