Give Your 401(k) a Quick Checkup

When was the last time you reviewed your 401(k)?

It’s easy to adopt a “set it and forget it” mentality, but I believe an annual 401(k) review can lead to better growth, higher balances, and smarter decisions. Fortunately, you can do a simple review of your account in about 30 minutes following the steps I’ve outlined here.

One side note before we get started: if you don’t already have a 401(k) or retirement account, it’s time to set one up today. Remember, time is your friend when it comes to saving for the future.

Update Your Strategies

The first step is to consider major changes or life events that have occurred over the past year. How will these changes affect your retirement goals? What needs to happen to align your goals with your 401(k) strategy?

These answers will outline the changes (if any) that need to be made to your 401(k). Whether you’re interested in high-risk high-growth companies or are nearing retirement and are seeking less volatile options, consider how your investments are allocated and if they’re helping or hurting your plans.

Check Matching Contributions

Many companies offer a 401(k) matching program. It’s crucial to understand how the program works and the percentage your employer is willing to match. We always recommend contributing the full amount if possible to maximize the benefit an employer is offering. If you can’t make the complete contribution, try raising your efforts by just 1%. That little change can make a big difference later on.

Look for Plan Changes

Has anything in the 401(k) changed over the past year? Were the matching contribution limits raised? Are there any new investment options? How about new online features or capabilities? Always be on the lookout for changes provided by your employer; some may be extremely beneficial.

Update Beneficiaries

This step is almost always overlooked. Take a few minutes and ensure that your beneficiaries are correct and have the right contact information. This could prevent a lot of headaches for those important to you later on.

Balance as Needed

We all know the old adage of “keeping too many eggs in one basket”, so make sure your assets are appropriately spread out. The idea is to be balanced in your approach, but determining the appropriate balance for your particular situation and goals can be tricky. Some plans offer online asset allocation help, so take advantage of this resource. A financial advisor can also be extremely helpful in this situation.  Ideally he or she has a better understanding of your individual circumstances and investment time frames and can help you determine an appropriate balance for your goals.

401(k) Changes Come in Two Parts

Remember, changes to your 401(k) are a two-part process. First, you can change how each new dollar contribution is arranged within the plan. Second, you can update the existing investments to match the new desired strategy. By covering both of these steps you’ll ensure your entire plan is working cohesively.


Time spent on your 401(k) is time well-spent. In my opinion, this key piece of many people’s retirement plans deserves at least a yearly review. So take the time to review your plan and make changes as needed. If you’re not sure where to start or have questions about finding an appropriate balance for your goals, feel free to give us a call.

Greg Horstman

For the past 28 years, Greg has worked to provide clients with exceptional financial advice and strategic investment strategies. In the summer of 2009 he partnered with Craig and joined Prosperion Financial Advisors. His service and personal dedication to clients is second to none. Learn more about Greg here.

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The performance data given represents past performance and should not be considered indicative of future results.

Securities and Advisory Services offered through LPL Financial. Member FINRA/SIPC.