10 Tips to Maximize Your 401(k) Benefits

Author: / 16 Jun 2023 / 401(k) Plan Information

Maximize your 401(k) plan

It seems like everywhere you turn, people are talking about inflation. As the cost of living and the average life expectancy increase, it’s more important than ever to make sure you have a secure financial future. Take steps to create it today.

One of the best ways to achieve financial stability down the road is by maximizing your 401(k) plan benefits. Whether you’re a small business owner, a small business employee, or you’re just looking for help making the most of your 401(k), Ubiquity has your back. These 10 tips will help you get your retirement plan in shape.

1. Understand the Basics of Your 401(k) Plan

Before you can make informed decisions, it’s crucial to understand the fundamentals of your 401k plan. Learn about the contribution limits, vesting schedule, and available investment options.

2. Start Saving as Early as Possible

The sooner you start contributing to your 401(k), the more time your money has to grow. Even if you can only afford to contribute a small amount, it will add up over time.

Answer a few simple questions to find the optimal plan for you and your small business.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

Or schedule a free consultation with a retirement specialist.

3. Take Advantage of Employer Matching

Many employers, even at small businesses, offer a matching contribution to their employees’ 401(k) plans. Make sure you contribute enough to take full advantage of this benefit. Otherwise, you’re leaving free money on the table. (If your small business 401(k) doesn’t offer a match, here’s a handy guide on what to do.)

4. Increase Your Contributions Over Time

As your income increases, consider increasing your 401(k) contributions as well. Gradually increasing your contributions will help you reach your retirement goals faster. You can contribute up to $22,500 per year, and an additional $7,500 once you hit age 50 – that’s $30,000 of savings annually.

5. Diversify Your Investments

You know the old adage: don’t put all your eggs in one basket. Diversify your investments to reduce your risk and increase your potential for growth. Consider investing in a mix of stocks, bonds, and mutual funds–this will help you recession-proof your 401(k).

6. Keep an Eye on Fees

High fees can eat into your retirement savings over time. Make sure you understand the fees associated with your 401(k) plan and choose low-cost investment options when possible. If you’re a small business owner, look for a plan with transparent pricing and flat fees.

7. Rebalance Your Portfolio Regularly

As market conditions change, your investment portfolio can become unbalanced. Rebalance your portfolio at least once a year to maintain an appropriate asset allocation.

8. Avoid Early Withdrawals

Taking money out of your 401(k) before age 59 ½ can result in hefty penalties and taxes. Avoid early withdrawals unless it’s absolutely necessary.

9. Stay on Top of Your Beneficiary Designations

Make sure you keep your beneficiary designations up to date. Otherwise, your 401(k) benefits could end up going to the wrong person.

10. Seek Professional Advice

If you’re not sure how to maximize your small business 401(k) benefits, consider seeking advice from a financial professional. They can help you create a retirement plan that’s tailored to your needs.

 

 

Ubiquity is not a registered investment advisor, and the information provided herein should not be considered legal or tax advice. We recommend consulting with your financial planner, attorney, and/or tax advisor for personalized advice.

Take the next step – Let me help you.

Contact Jay Jacob, Sr. Retirement Plan Consultant

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Talk to Sales
Schedule a Free Consultation

Contact Support
Visit our Help Center
support@myubiquity.com
Monday–Friday
6am–5pm PT / 9am–8pm ET

© 2024 Ubiquity Retirement + Savings
44 Montgomery Street, Suite 300
San Francisco, CA 94104