Amidst the hustle and bustle of everyday life, many of us don’t have the time or energy to monitor our 401(k) account (or other retirement plan). While too much tinkering can be problematic, the temptation to “set and forget” 401(k) funds should also be resisted. We recommend that clients perform periodic check-ins with their retirement plans – at least once a year.

Here are some things to keep an eye on:

Contribution Rate:

Are you taking advantage of your company’s full contribution match? If not, consider increasing your 401k contribution rate to maximize your employer’s matching contribution; failing to do so leaves compensation on the table. If you’re already fully matched, think about giving your retirement a raise! A one percent increase in contributions might not be noticeable in each paycheck but can make a huge impact over time, thanks to compound growth.

Asset Allocation:

Is the mix of stocks and bonds in your portfolio still appropriate? Have your financial circumstances changed significantly since you made your initial investment selections? Each of us needs to think about our investment time horizon, risk tolerance, and goals for retirement. If a portfolio is too aggressive, or not aggressive enough, consider a change to your target asset allocation. You should also keep an eye out for uninvested cash or consider setting up an automatic investment program within your plan.

Rebalancing:

Depending on the structure of your plan, your account may or may not rebalance automatically. Check to see if market movement has caused the asset allocation to drift significantly. Consider taking advantage of an automatic rebalancing tool if it is available. Periodic rebalancing will honor your asset allocation needs while reflecting the realities of global capital markets.

Investment Selection and Fees:

You can review your investment selection and the fees associated with it by requesting the most recent listing of investment options for your plan that includes a summary of all associated fees. As the retirement landscape changes, new and more cost‐effective options may become available within your plan. Being mindful of costs is one way to promote long-term growth in your portfolio. You may also discover new investment vehicles that were not previously available that more appropriately satisfy various portions of your target asset allocation at a lower cost.

Done with DIY?

In the past, FLP’s ability to assist in the management of 401(k) investments has been limited to periodic input and investment selection feedback. We haven’t historically been able to bring 401(k) plans onto our platform for monitoring, oversight, or trading – we’ve been limited to manually reviewing statements from our clients on an ad hoc basis. With retirement plan assets being a big piece of many clients’ net worth, this inability to actively manage and oversee has left a void in the implementation of some clients’ investment policies and financial plans.

In 2023, we began a new partnership with Pontera – a secure platform that allows investors to assign management authority of their workplace retirement plans to advisors like FLP. For clients with active workplace retirement plans who may not have the time or energy to self-manage their accounts, Pontera has provided a valuable bridge to FLP’s professional management of retirement accounts. This partnership has allowed our advisors to integrate retirement accounts into household investment strategies, assume responsibility for the ongoing vetting and selection of investment options, actively rebalance portfolios, and reposition holdings within asset classes in order to align with our investment team’s best thinking on prevailing economic and market conditions. If you are interested in learning more, please read below – and contact us for more information.

As always, your FLP service team is happy to discuss this, or any other financial topics that might be of interest.

DISCLOSURE: Registration with the SEC should not be construed as an endorsement or an indicator of investment skill, acumen or experience. FLPutnam is not licensed to provide and does not provide legal, tax, or accounting advice to clients.  Advice of qualified counsel or an accountant should be sought to address any specific situation requiring assistance from such licensed individuals.

Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. Diversification does not eliminate the risk of market loss. A long-term investment approach cannot guarantee a profit. Historical performance is not indicative of any specific investment or future results.

This document has been created for informational purposes, and it should not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Nothing in this communication is intended to be or should be construed as individualized investment advice. All content is of a general nature and solely for educational, informational and illustrative purposes.