he 401(k) fund is undergoing a few changes that are bound to affect almost everyone in its coverage. As such, if you are planning to fund your retirement using the 401(k) accounts, it is about time that you took a keen interest in the changes that are in the offing. Of course, the largest change is going to be in the amount that you will be required to contribute towards your retirement. The government is in the process of setting up a thrifts savings plan that will increase this value from $500—from $17,000 to $17,500. These changes are expect6ed to be in effect as of the 31st of December this year. This is a good thing for most people as it means the amount of money that will be available to you upon retirement will increase. To take advantage of these changes it is important that you perform an audit to determine that you pay as much as you can legally. In addition, some significant changes that have been added include changes in the disclosure provisions. From the start of the coming year, the first that 401(k) participants will be eligible to receive quarterly and annual statements listing fees, which are to be charged to the account.
So what are some of the strategies that you can put in place in order to ensure that you maximize the 401(k) strategy? To start with, you should be keen on the amount that you pay in fees. The percentage that you pay in order to manage your account may at the end of the day be more than you can actually handle if care is not taken. If it is possible for you to minimize the amount that you pay in fees, then the better for you. You can minimize these fees by investing in low-cost index funds or by managing the fund yourself. It is also important that you keep yourself from trying to tap into your retirement funds at an early age. The temptation is often great especially if you are going through some tough economic times. However, keeping yourself aware of the danger you pose through such an action goes a long way in keeping you level headed.
It is essential that you come up with an investment plan and stick with it. At times, some investments like the stock market tend to fluctuate with time depending on the market direction. This is usually one of the main reasons for people changing their strategies. However, it is often not advisable to change the execution of your strategy midway, especially if it involves spending more than you are comfortable with. You can also use the rollover strategy in cases where you have a large sum in the works and you would like to invest as well. Often, the cash cheque is tempting enough that most people would rather take it instead of investing it. Taking your time to fine-tune the 401 (k) accounts is a good strategy that pays off at the end of the day.