If you’re like many working Americans, your 401(k) may be one of your largest assets. If you regularly contribute to your plan and even receive matching contributions from your employer, your 401(k) balance can accumulate quickly.
Your 401(k) plan is designed to serve as a retirement savings vehicle. To encourage long-term savings, 401(k) growth isn’t taxed as long as the funds stay in the account. That tax deferral can often help funds compound at a faster rate than they would in a taxable account. You pay taxes on your 401(k) funds when you take distributions, and if you take a withdrawal before age 59½, you could also face a 10 percent early withdrawal penalty.
Benefit enrollment season is coming up. Even if you don’t need to enroll in new benefits with your employer, it is a great time to review your current benefits and see if any changes are necessary.
Unsure which changes you need to make? Choosing the right employer benefits depends on your unique needs, goals and financial situation. However, if one of your primary goals is to save more money for retirement, then there are a few changes or adjustments you may want to consider.