Jan 1, 2020

In this episode of Inside the Plan with the 401(k) Brothers, Bill Bush and Andy Bush, advisors at Horizon Financial Group, discuss New Year’s Resolutions plan participants should consider for the year 2020. In addition, they talk about the newly passed and signed SECURE Act, the most significant retirement plan legislation to be enacted in over a decade.

Episode Highlights:

According an article in US News, 80% of New Year resolutions fail by the 2nd week of February! Ouch.  Here we offer 7 resolutions you should consider making, when it comes to your company retirement plan account:

1. Set up your online account access. This sounds simple, but you’d be surprised at how few people actually do this. We live in the digital age, where you can do just about anything on your phone or computer. So, make the leap and set up your online access.
2. Log in to your online account at least 3 times this year. (Spread throughout the year, of course). Check things out, review your balance, see what your return is, and look at your fund options. Opt for electronic delivery of your statements, if you can. The point is, you have access, so use it regularly. And if you log in 3 times or more this year, you’ll be using the tool more than most participants.
3. Use your provider’s online calculator 1 time this year. “Am I doing enough”? A common question when it comes to retirement savings. What does the percentage you’re saving now going to mean in the future? Most providers we deal with have online calculators to help you answer those questions. Usually, you can add in other outside funds, including your spouse’s info, as well as Social Security into the calculator to help you figure if you are on track or not. It’s an exercise worth doing once a year.
4. Increase your contribution. This also is a way to help you reach what may be another of your resolutions: save more money. Check with your plan administrator to see how often you can change your contribution rate (these vary by plan). At the next opportunity, think about upping your rate by a percent or 2. Over time, it could make a big impact in your account…and your future self will thank you! Your online calculator can help you figure out what the impact might be.
5. Learn the maximum you can contribute, and set a goal to reach it. Many folks often aren’t sure of the maximum they can defer to a company retirement plan. For instance, some think they can only put in what the company match is…NOT TRUE. The annual limits are actual dollar amounts, and vary depending on the type of plan you are in. If you try to max-out your contribution each year, remember some of the limits have changed for 2018, so you may need to change your contribution rate. (for 401k, 403b, and most 457 plans the limit is now $19,500…for those 50 and older, you have available catch-up contribution opportunities also.) For more information on the limits, ask your plan administrator.
6. Review your asset allocation. Whether you do this online, or with your next quarterly statement, it’s worth taking a look at, at least once a year. There has been solid growth in the stock market over the past year, so is your percentage of equities in your portfolio still consistent with your risk tolerance and time horizon? Worth checking out. You may need to re-balance…or set your account up to automatically rebalance online, if available.
7. Review your beneficiary designation. If you’ve had a significant change in your life recently, you may need to update the beneficiary/beneficiaries on your account. Marriage, divorce, death of a spouse, or other events could trigger the need to review this, but sometimes it’s overlooked.

Good luck with those resolutions! If you need any help with your retirement account, give us a call at 225-612-3820.

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