Capstone Wealth Partners Capstone Wealth Partners Capstone Wealth Partners Capstone Wealth Partners
MENUMENU
  • Our Story
  • What We Do
    • Our Process
    • Services & Pricing
  • Resources
    • Blog
    • eBooks
    • Videos
    • Events
    • Advisor Resources
  • Contact
  • Schedule a Call
Capstone Wealth Partners Capstone Wealth Partners
MENUMENU
  • Our Story
  • What We Do
    • Our Process
    • Services & Pricing
  • Resources
    • Blog
    • eBooks
    • Videos
    • Events
    • Advisor Resources
  • Contact
  • Schedule a Call

5 Reasons to Customize Your 401k

By Ryan Sheppard, ChFC®

April 14, 2014

2 min READ

I have no doubt that you’re very busy. You probably have a number of investments you try to monitor daily. One of the things you liked about your 401k was relative freedom from ongoing involvement with its management. Yet we are talking about a part of your financial future. You need to make sure the plan is working as hard as possible for you.

Here are a few simple steps to take to customize your 401k to ensure it performs according to the long-term goals of your overall financial plan:

Align your 401k with your retirement goals

Multiple factors drive the amounts you invest and the types of investments you chose. These include your age, the amount you have already accumulated in all retirement instruments, and how long it will be before you retire. As always, you should balance riskier options (with potentially high returns) with conservative choices that will grow slowly (but hopefully not lose money).

Maximize the tax shelter afforded by the 401k

While your 401k is probably not your only tax shelter, it is a significant one. You want to use this shelter for as much of your income as you can afford to contribute – but not if it limits your ability to invest in options that will give you a better rate of return.

Take full advantage of your employer’s match

Any way you want to look at it, this is free money (where else can you get a 100% return on your investment?!). Every employer has its own rules as to how the match is provided. You may want to contribute more than the amount the employer will match, but whatever you do – find a way to at least get your employer’s full match.

Periodically re-evaluate your investment choices

You have heard this before. Past performance is no guarantee of future results. When you selected the funds within your 401k, you likely based your decision on fund makeup and solid performance history. After you have held your funds for a while, you will want to review their returns to determine whether they are continuing to perform as predicted. If they are not performing, exchange them for funds that are faring better. Customize your 401k plan to generate income efficiently.

Adjust your investments based on major market shifts

During shaky economic times, some investors shift investments into a money market fund for stability. However, the rate of return is so low that you can actually lose money if you keep your money there too long – due to not keeping pace with inflation. Additionally, fees associated with the fund may exceed the return on investment, putting your account in a loss position. Stick with your chosen strategy, and don’t change your long-term approach based on short-term market fluctuations.

The thing to keep in mind is that when it comes to 401k plans, one size does not fit all. Investments made by one person are not appropriate for another. Most plans offer a tremendous amount of flexibility when it comes to managing your account. It is important that you take advantage of that flexibility to customize your 401k investments to help secure your financial future.

If you use the services of a financial advisor, be sure to share the features and options of your plan with him or her to ensure that you make the most of the financial opportunities in your retirement plan.

 

Author

Ryan Sheppard, ChFC®
Ryan Sheppard is a financial planner and co-founder of Capstone Wealth Partners, an independent Registered Investment Adviser based in Columbus, Ohio. He has a degree in Economics from Ohio State and has earned the ChFC® (Chartered Financial Consultant) designation for advanced knowledge in financial planning. Ryan has 10+ years of direct client experience, and serves as the firm's COO.

SHARE:

  • Facebook
  • Twitter
  • LinkedIn

RELATED ARTICLES

Investing

3 Tips for Investing Wisely in a 529 Plan

Ryan Sheppard, ChFC®

November 13, 2020

  2345 Views

Investing

Investing 101: A Beginner's Guide for Recent College Graduates

Ryan Sheppard, ChFC®

February 28, 2020

  886 Views

Investing

Whoa, Markets Feel Scary Again

Ryan Sheppard, ChFC®

February 9, 2018

  3756 Views

Investing

Market Volatility: Are You Getting What You Ordered?

Ryan Sheppard, ChFC®

August 28, 2015

  1401 Views

Get the Free College Money Report – customized for you – and know before you go!

Get My Report

No spam, guaranteed.
Please read our Privacy Policy.

SEARCH THIS SITE:

ABOUT OUR BLOG:

Capstone Wealth Partners is a fee-only independent Registered Investment Advisor in Columbus, Ohio. We are financial planners for college-bound families

The Capstone Blog offers up our best ideas on how to save and pay for college, all while staying on track for a confident retirement.

FILTER BY CATEGORY:

  • College
  • College Planning
  • Financial Planning
  • In The News
  • Investing
  • Retirement
  • Tax Planning

FOLLOW US:

 

GET IN TOUCH

The Millennium
6037 Frantz Road
Suite 104
Dublin, Ohio 43017

(614) 754-7805

Book Joe to Speak

UPCOMING EVENTS

  1. Smart Money Moves for the College-Bound™ WEBINAR

    February 17 @ 7:00 pm - 8:30 pm

View All Events

FOLLOW US

 
Client Corner
© 2020 Capstone Wealth Partners
  • Privacy Policy
  • Form ADV
  • Advisor Resources

Cookies

We use cookies to improve your experience and analyze user behavior. By continuing to use this site, you consent to our use of cookies.

Accept
Read more
Change Settings
Cookie Box Settings
Cookie Box Settings
Select which cookies you will allow this site to use:
  • Block all
  • Functionality
  • Analytics
  • Advertising

  • Essential cookies help make a website usable by enabling basic functions like page navigation and access to secure areas of the website. The website cannot function properly without these cookies.

  • Functionality cookies enable a website to remember information that changes the way the website behaves or looks, like your preferred language or the region that you are in.

  • Analytics cookies help website owners to understand how visitors interact with websites by collecting and reporting information anonymously.

  • Advertising. cookies are used to track visitors across websites. The intention is to display ads that are relevant and engaging for the individual user and thereby more valuable for publishers and third party advertisers.

Save & Close