3 Simple Things You Can Do To Juice Your Retirement Account

As the old saying goes, don’t look a gift horse in the mouth. If you have a 401(k) at work, there’s a good chance your company offers some sort of employer match as an incentive. While every matching program is different and you should speak to HR about your company’s specific plan, free money is, well, free money and shouldn’t be disregarded.

As an example, if your company matches 100% of your own contributions up to 5% and you sock away $200 every paycheck into your 401(k), that means $20 will be contributed into your retirement account each pay period. In this instance, effectively doubling your contributions is nothing to sneeze at. Just be sure you understand your employer’s vesting rules before you move on to greener pastures because, like most things in life, free money has strings attached.

Depending on your age and risk tolerance, investing the money in your retirement plans can provide much higher returns than just using a savings-based retirement account. While the stock market can certainly be a bumpy road at times, history tells us that equal parts patience and wise investing can pay significant dividends — both literally and figuratively — over the long term. If investing seems like a foreign language to you, ask your financial representative about age-based mutual funds or allocation funds to help simplify the process and make finding appropriate investments relative to your age and goals a snap. Online investing with robo advisors can also take the mystery out of investing by using algorithms and calculations to offer advice.

If you prefer a DIY approach to investing rather than automated solutions like age-based or allocation funds, remember that the different varieties of stocks, bonds, and anything else you might choose don’t grow at the same speed. In other words, what might have been an appropriate mix of those various investments last year might not be one today. Once or twice a year, rebalance your portfolio to make sure the combination of those stocks and bonds stay generally within your own guidelines. Failing to do so could result in retirement accounts that are either too heavy in stocks and become extremely volatile or, conversely, too conservative after a market dip and don’t spring back to life as well as they should.