You know that planning for retirement is only one piece of a bigger puzzle, and right now maybe you need to focus on some of the other pieces — college savings, mortgage, etc. We understand. And while it’s impossible to focus on everything all at once, now might actually be the time to revisit your retirement plan and consider a few things:
1. Increase Your Contributions
In addition to regularly increasing your 401(k) contribution by 1%, you may also consider shifting even more toward retirement if your contributions haven’t kept pace with your income growth. It’s important to note, however, that there’s an annual contribution limit of $18k if you’re under 50, with those over 50 able to make an additional “catch up” contribution of $6k. 1
2. A Rebalancing Act
You may have initially picked the funds in your 401(k) based on your own asset allocation objectives; perhaps you used your risk tolerance or target retirement age as an input for picking a fund; or maybe you’re not even sure what’s in your portfolio (that’s okay too).
Regardless of your initial intent, the assets that comprise your retirement portfolio grow at varying rates. Regularly rebalancing your portfolio to keep it in line with your goal time horizon can help offset any unwelcome surprises that might come when doing a casual “drive by” of your accounts.
3. A Macro View
Along with your investment plan and college savings, all of the pieces of your portfolio should be working together to help deliver the retirement you deserve. To the above point of managing risk, having this macro view can be helpful in determining when it’s time to rebalance your retirement plan. NerdWallet2 has a helpful guide for rebalancing your 401(k) that’s worth visiting.