Are you getting the most out of your 401(k)?


Investment Consultant, Gary Goldberg Financial Services

Most of us are smart enough to know that retirement will be expensive, and that the more we save and invest today, the better our chances are to live a comfortable retirement. If you’re anything like me, your 401(k) plan is the primary savings vehicle to achieve this goal. As such, I thought it would be appropriate to discuss some of the missteps I’ve seen investors make, as well as illustrate some strategies of how to maximize the benefits of your 401(k).

It goes without saying that the first step is to maximize your 401(k) contribution – you can put up to $17,500 per year into the plan ($23,000 per year if over age 50). Over 20 years, assuming an 8 percent annual return, this will grow to almost $883,000 – not a bad start. Just as importantly, there are certain guidelines you should follow as you are contributing to and growing your 401(k) accounts. First, select lower cost investments – a recent study by Morningstar, the independent Mutual Fund rating service, showed that the single biggest contributor to the performance of 401(k) accounts is the cost of the underlying investments. In other words, choose index funds when possible, they tend to have the lowest costs and therefore are more likely for you to keep your money as opposed to paying it in fees.

Second, make sure to maintain a balance in your portfolio. All too often I come across investors who have ignored their investment allocation, and have significantly under-performed the market as a result. At minimum, you should review your portfolio holding semi-annually. This also brings me to the third critical component to success – don’t tinker too much. Some like to adjust their investment allocation monthly or even more frequently. This is almost always a mistake. As our CEO Gary Goldberg often says, “In my 45 years in the business, I’ve never known anyone who can time the market consistently. As a matter of fact, I’ve never known anyone who knows someone who can time the market consistently.”

Lastly, get advice. Your employer most likely offers a quarterly investment class or review, take advantage of it. If your employer doesn’t offer such a class or seminar, call me. I’d be happy to help and will hold the seminar at your place of work for free.

Christopher Hanly is an investment consultant with Gary Goldberg Financial Services in Suffern and can be reached at (845) 368-2900 ext. 247 or


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