Matching Gives You the Means
If your company has a matching program, take advantage. You can invest a percentage or an amount, and try to invest the maximum allowed and what you can afford. When I worked at a well-endowed university, not only did they match me, but also they put in one more full percentage point once I met their match. Of course that’s one account I still have to check in on, but matching is a no-brainer.
Don’t Be a Pushover, but Do a Rollover
This is my sticky point. Think of your retirement accounts as the luggage you want to keep near you at all times. Because when you know how your bags are packed and what your luggage looks like, it’s hard to lose any of it once you financially land. Find a financial advisor that you trust (many times your new plan comes with this option) and see if the new plan offers better returns than your old plan. I called on my investment banker relative to help me choose my funds in my new 401k plan and he was so thrilled with my choices that he encouraged me to rollover my two other plans. Great advice, and now I just have to get out of my fantasy hammock and get the paperwork started.
Keep Counting Your Bananas
Keep on top of your investments. I learned that was a solid bet in diversifying my plan among different funds, and that I could put a percentage of my bi-monthly investment into a Roth 401k. By doing this, my contributions to the Roth are made after-tax (compared to pre-tax with the traditional 401k) and allow me to withdraw from that fund after age fifty-nine and a half—and without penalty if I maintain the account for five years. I also made a personal plan to contact my investment advisor on a quarterly basis to go over my investments’ progress, and then I can make changes accordingly. Though I try to know more than my lot, I recognize that my relative—or managers of funds and retirement plans—make it their business to know more than I do, so I can stick to counting my bananas in my hammock after age sixty-five.
Related story: Make The Most of Your 401(k)
