Easy Ways to Help Grow Your Retirement Accounts

Company-sponsored 401(k) plans have undergone big changes over the years, including matching contributions from your employer, and automatic enrollment, rebalancing and contribution escalators. Even if you don’t have these options, you can still model your individual retirement investing behavior after some of these plan features.

Auto Enrollment

If your retirement plan doesn’t offer automatic enrollment, ask what you need to do to join. If you don’t have a workplace plan, make it your mission to research the qualifications and contribute to an individual retirement plan.

Auto Contributions

Before you start a new job, forecast your take-home pay for your monthly budget after subtracting a number like 10% for retirement contributions. (Remember that your contributions will likely be tax-deductible.) Start contributing as soon as you’re eligible, because time means everything when it comes to building your retirement accounts.

Auto Escalators

When you get a raise, why not put the extra money into a retirement account? If you never had the raise, you won’t miss it. Employers often do this automatically for plan participants. If yours doesn’t, request a change to your contribution level.

Auto Choice

Some people don’t enroll in 401(k) plans because they don’t want to choose among investments. So some employers automatically put employees’ contributions into target-date or balanced accounts for them. Do the same if you don’t want to choose among investment options.

Auto Rebalancing

If you choose your own investments in a workplace or other retirement plan, it pays to diversify.* To keep your portfolio diversified as planned, you’ll need to rebalance it regularly, say every six or 12 months. Many 401(k) plans include this feature; otherwise set yourself a reminder.

Auto Rollover

Some employers automatically roll over retirement plan balances for employees leaving one job for the next, but the new employer will have to accept these rollovers. If your previous employer doesn’t do this automatically, ask your new place of employment about the process of having the balance rolled over.

*Diversification cannot eliminate the risk of investment losses. Past performance won’t guarantee future results. An investment in stocks or mutual funds can result in a loss of principal.