Apply these 5 tips to your 401(k) for a solid long-term strategy

Today, 1-in-3 workers have no savings set aside for retirement and 8-in-10 say they need more money to be on track for retirement. [1]

Whether you’re brand new to retirement planning or an old pro, participating in an employer sponsored 401(k) retirement plan can provide a significant source of retirement income.  Here are five long-term strategy tips to apply to your 401(k) to keep you on track to achieve your retirement goals.

1. Calculate your needs

The first step on your path to 401(k) success is to calculate your retirement needs. Copilot 401(k) service powered by PAi provides you with access to a Years of Retirement Experience.  The Years of Retirement Experience takes a look at your current salary, length of time until your retirement, number of years you plan to be retired and your comfort level with investment risk.  This easy-to-use tool cuts through the clutter and shows the impact of your retirement savings decisions. Once calculated, you will be provided with a measure of your current path for meeting your retirement goals.  If you’re not on a path to meet your goals, it allows you to make changes to your retirement variables such as investment strategy, date of retirement, social security and contribution amounts to get you back on track.

2. Take advantage of a company match

While you may not always be able to save as much as you would like due to life events, a common piece of retirement planning is to take full advantage of a company match that may be offered by your employer.  This match provides additional dollars to your retirement plan which will contribute to the potential long-term compounding and growth of your account.

3. Get advice selecting your retirement investments

Choosing the right mix of investments within your 401(k) plan is crucial to realizing your retirement goals.  It can be easy to get overwhelmed by all the choices available.  Take advantage of the services of licensed financial professionals that are part of your retirement plan.  The Copilot 401(k) service makes eRIA’s Financial Service Representatives available to provide you advice on the proper portfolio mix of investments to meet your goals and time horizon. Reliance on investment professionals can reduce the likelihood of common investor behaviors like chasing performance or attempting to minimize short-term losses when the markets are down.

4. Stick to your plan

It’s important to stick to your long-term investment strategy.  Make sure to monitor the performance of your account, update contribution amounts and track your desired years of retirement. 

When financially feasible, take advantage of the high contribution limits of a 401(k) plan. Try to increase your contribution every time you get a raise or your budget allows.  The more you can contribute, the better chance you have in reaching your goals.

5. Your 401(k) account after retiring

Once you reach retirement it doesn’t mean that utilizing your 401(k) plan needs to end.  Talk with financial professionals and your tax advisor on when to start drawing income from your account. Deciding when to draw income is different for almost everyone based on other income sources.  Invest your 401(k) plan appropriately to keep it working for you.

When considering a 401(k) retirement savings plan for your business, look for one that is backed up with years of experience and understands that investing in retirement should be a long-term strategy. Don’t worry, you won’t have to go-it alone. 401(k) plan providers like PAi offer services that include education and timely alerts. Their CoPilot service isn't just a 401(k) plan - it's a managed retirement savings service. This means you can remain focused on running your business, not managing a retirement plan. It’s about you and your workers owning their own retirement readiness. Contact us online or give us a call to get your CoPilot plan started: 800.236.7400.


[1] Retrieved from Jan 2016.

Nicholas Crary, CPFA - Financial Services Representative - - 800-236-7400 x3381

Nick is a subject matter expert on 401(k), retirement savings, participant advice, small business 401(k), investments, education on options.