Maximizing your company’s 401k is one if the best way to ensure a good retirement. We have discussed the importance of a well balanced and well allocated 401k plan. It is important to spend time assessing your investments but it is also essential to understand your company’s 401k plan itself. The following are 5 important things to learn about your company’s 401k plan.

1.Does Your Employer Match Your 401k?

While not all employers match 401k contributions many of them do. This isn’t a requirement but many large companies offer 401k programs to assist their employees build a safety net for retirement. If they do match then learn the methodology of the plan such as how much and how often they match. Also learn if new employees are automatically enrolled in the company’s 401k plan.

2.What are the Fees?

This question is extremely important. Some 401ks charge a set up fee as well as basic operational fees. There are also fees and restrictions on moving funds and assets, and of course termination costs, so become fully educated on what you will be paying

3.Who Manages the IRS and Plan Documentation

It is always easy to forget about administrative tasks but unfortunately it is important and could be essential in the long run if you ever experience an IRS audit. You want to ensure that your plan documentation is valid and up to date and in good hands. Speaking of fees, don’t forget that there are administrative fees incurred so you should make sure you are getting what you paid for.

4.What are the Contribution Limits?

Contribution limits vary from year to year with 401k plans, as well as other retirement accounts, so be sure you know the maximum so you can maximize your plan. Plus as you age there are additional contributions that can be made into the 401k.


Different companies have varying levels of communication about their 401k plan but you should always have access to your balances as well as training on how they work so you can make informed decisions and be up to date on the company’s decisions. Some companies have seminars and manuals on investing as well as individual counseling on investment decisions. Make sure to find out if there are any costs involved in the actual training or for the materials. Learn about your company’s 401k distributions and policies on early withdrawal of funds.

Be educated about your investments as well as the 401k plan itself is vital for successful investing. It is your money and your future so be sure to take an active role in the investment process so you can be educated consumer. Take advantage of all the earning potential of your company and become involved.

For more information about investment strategies, click here.

Leave a Reply