November is typically the month when you are able to review and change your work benefits for the year ahead. Now I know what you’re going to do. Nothing, right? Most people ignore all the emails about “open enrollment” and don’t review their coverage, or make any changes.
You might think you’re saving time, but your lack of focus is probably going to cost you a lot of money. Money you could have in retirement if you took a few minutes today to pay attention to your workplace 401(k) or 403(b) plan.
- Confirm you are getting the maximum employer matching contribution. About one in five people saving for retirement don’t contribute enough to qualify for the maximum matching contribution from their employer. I always want everyone with a retirement plan that matches to set their contribution rate to whatever is required to earn the maximum matching contribution.
- Sign up for free rebalancing. From time to time it is important to make sure that your investments continue to be in sync with your long-term goals. For example, let’s say you have decided that you want to have 60% invested in stocks and 40% in bonds. If you haven’t checked your mix since this bull market began in 2009, your 60/40 mix is likely closer to 75/25 today, because stocks have had such a strong run. If your plan offers a free rebalancing service, sign up for it. If not, from now on you are to use the annual fall open enrollment period as a reminder to check your 401(k) allocation and make any tweaks that are necessary. The great thing is that there is no tax bill for moving money around inside a 401(k), 403(b) or IRA.