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401k plans, IRAs, Roth accounts, pensions, annuities, Social Security, and withdrawal planning. Build the balance you need and make it last.
Your own 401(k) contributions are always yours, but employer match money can take years to vest, and leaving weeks before a vesting date can forfeit thousands. Before you give notice or accept an offer, look up that date, then negotiate a start date after it or a signing bonus that covers the loss.
A 401(k) loan’s interest goes back into your own account, so the rate looks harmless. The real costs are the market gains the borrowed money misses and the tax bill if you leave your job before the loan is repaid. Before you borrow, try an emergency fund, a 0% balance transfer, or a credit union loan.
A traditional IRA can cut your taxes now and taxes withdrawals later. A Roth taxes the money going in, and qualified withdrawals come out tax-free. Choose the Roth if you expect a higher tax rate in retirement than today, and the traditional IRA if you expect a lower one.
Leave a portfolio alone and rising stocks will quietly raise its risk. Pick one date a year to compare your mix with its target, and rebalance whenever an asset class has drifted 5 percentage points or more. Rebalancing won’t raise your return, but it keeps your risk where you set it.
A 401(k) you left at an old job doesn’t follow you, and a small one may already have been moved into an IRA you never opened. Search the Labor Department’s lost-and-found database or call your old plan, then move what you find with a direct rollover, never a check made out to you.
Money you put in a traditional 401(k) or deductible IRA comes off your taxable income, so in the 22% federal bracket, a $100 contribution costs you about $78. Figure that cost at your own tax rate before you decide you can’t afford to save more.
The beneficiary form on your 401(k), IRA, or life insurance decides who gets that money, no matter what your will says. Pull up every form this week, confirm each primary and backup name, and set a reminder to check them again every few years and after any marriage, divorce, or birth.
Sequence of returns risk means the order of your investment returns matters once you start withdrawing. Losses in your first years of retirement force you to sell shares at low prices, and those shares never recover for you. Keep a few years of withdrawals in cash and short-term bonds so you can wait out a downturn without selling stocks.
Your 401(k) contribution limit starts over on January 1, and any room you don’t use by your last December paycheck is gone for good. Each January, look up the new IRS limit, divide it by your number of paychecks, and set your contribution to that amount if your budget allows.
Claiming Social Security at 70 instead of 62 makes your monthly check about 77% larger if your full retirement age is 67. If you’re healthy and can cover the gap from savings, delay your claim. The larger checks make up for the missed years by about age 80, and they rise with inflation for life.
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