Financial experts recommend monitoring your 401k, because there are benefits to take advantage of when you do so. Curious how you can check your 401k? Here are the essentials you must know!
The Account Statement
One of the first things you must do is read your account statements. How often you receive an account statement depend on your investment company. Some , send their account statements out monthly, but some only send them out every two months or quarterly. So, make sure you know when your account statement is due and read it thoroughly when it arrives!
You do not have to wait for your paper account statement, because most companies provide a website where their employees can view information regarding their 401k.
Most online 401k accounts also allow their users to make changes to the investments being made; this could mean you have the opportunity to choose different stock, switch to bonds, increase your employee contributions, or even decrease them as you see fit.
In most cases, employees have to set up this account with their company before they can use the online monitoring feature. If online monitoring is available, your employer can provide you with a phone number to set up your online account. The phone number could also be present on your paper statement.
Why Should I Monitor My 401k?
There are many reasons why you should monitor your 401k! To give you a better understanding about its importance, here is a summary of the main reasons why 401k monitoring is essential for employees.
Your Contributions
One of the reasons why you should check your 401k is to keep tabs on your own contributions. By checking your statements, you can determine how much you’ve contributed over a certain period of time. Of course, you could also decrease your contributions if you find it difficult to make ends meet.
Related: 4 Common 401k Mistakes People Make
Employer Contributions
Since many employers will contribute to your 401k, it is essential to check their contributions too. Always make sure your employer is contributing to the right amount to your 401k, since mistakes can happen sometimes. By monitoring it yourself, you can make sure mistakes can be fixed as soon as possible.
Investment Performance
There will be some investments connected to your 401k, so checking how those investments are performing is essential for your financial future. Some investments are more dangerous than others; this includes stocks! If your stocks are not performing that well, monitoring your 401k gives you the option to make some changes before it affects your financial future.
Related: How to Manage Asset Allocation For a 401K
Conclusion
Checking your 401k is an essential part of safeguarding your financial future. Don’t just check your 401k though, also check any updates and maintenance fees that may apply to your 401k.
Some companies also offer their employees free seminars on 401k investments. Contrary to what most employees believe, these seminars can be incredibly lucrative and make a real difference on your 401k. So, be sure to inform with your company to determine if there are such seminars available to you.