3 Simple Ways to Tweak Your 401(k) Strategy for Retirement - Wealth Management in Investing, Retirement | Better Money Decisions

3 Simple Ways to Tweak Your 401(k) Strategy for Retirement

by Jocelyn Black | June 4th, 2024


It’s too easy to let your 401(k) run on autopilot. When I first joined the workforce, I was excited to enroll in my company’s 401(k) plan. I knew it was an important benefit and I was happy that my employer was offering a match.

I figured I was set. As I grew in my career and started to learn more about investing and financial planning in general, I realized that a “set-it-and-forget-it” strategy can work for a while, but doesn’t always.

I also learned that life usually throws you curveballs that can change the best laid plans and those “what-ifs” should be expected and strategized for as part of a “Plan B” and even “Plan C” scenario.

When it comes to planning for retirement, it is a puzzle that needs to be carefully fit together over time and one of the biggest pieces of that puzzle for most of us is our employer’s retirement savings plan. Making it a priority to periodically review and reassess your situation and goals allows you to make important adjustments to your 401k that can solve your puzzle, regardless of what happens along the way.

With decades of experience helping businesses and families alike adapt their plan for the future, we have some ideas. We’ve broken down three simple ways to tweak your strategy for a smooth transition and set your 401(k) for personal success.

Why You Can’t Let Your 401(k) Plan Run On Autopilot

  • The market changes. The stock market is constantly fluctuating, so your investments are not guaranteed to grow at a steady rate. If you let your 401(k) plan run on autopilot, you could end up losing momentum on your financial security.
  • Your goals change. When you first start saving for retirement, you may have a general idea of how much you need to save. But as you get older, your goals may change. You may want to retire early, or you may want to travel more. You also may get a big pay raise along the way and have more expensive goals. If you don’t review your 401(k) plan on a regular basis, you may not be saving enough to reach your new goals.
  • Your career changes. It is way too common for people to forget about and neglect their 401(k) plan when they leave one job and start another one with a different employer. If your new employer offers a plan, it will have different investment options and fee structure, and potentially a different match option. You should carefully consider whether it makes sense to roll over the balance from your former employer’s plan to the new one, or if it makes more sense for you to roll it over into an IRA with potentially lower fees, better investment options and more flexibility.
  • Your fees can eat into your returns. The fees associated with 401(k) plans and their investment options can vary widely and often take an expert to help you understand exactly what you’re paying to participate. If you’re not careful, you could be paying hundreds or even thousands of dollars in fees each year, making it harder to reach your retirement goals.

If you want to make sure you’re getting the most out of your 401(k) plan, it’s important to have clarity about what you have and your options, and to take control of your investments. Review your plan on a regular basis with your financial advisor, and make sure your investments are aligned with your goals, risk tolerance and time horizon.

Start With These Questions

Here are three simple questions you should be asking to begin the process of taking stock (pun intended!) of your employer plan and making beneficial changes:

  1. How much am I paying?
  2. Am I comfortable with the risk level of my investments?
  3. Does my investment strategy align with my future goals?

Three Actions You Can Take Today

Investing in your future starts today, and there’s no better time than now to revisit your personal 401(k) plan. Whether you’re a seasoned investor or just beginning your journey towards retirement, taking proactive steps to reassess and optimize your 401(k) can yield significant long-term benefits.

By evaluating factors such as investment performance, contribution levels, and retirement goals, you can ensure that your plan remains aligned with your evolving financial needs and aspirations. Don’t wait for tomorrow to secure your financial future—take action today and embark on the path towards financial freedom and security.

1. Reassess Your Risk Tolerance

When you’re younger and still have decades before retirement, riskier investments can have bigger rewards, and your portfolio still has time to bounce back in the case of a market dip. As you age, however, you may want to gradually shift your investments from higher-risk assets to more conservative ones to better protect your retirement savings.

Dividend-paying stocks, bonds, annuities, or dividend-focused funds can provide a steady income stream during retirement. But which kinds of investments are safe and which are more risky? While each investment type has its own risk profile to consider, stocks are usually considered more volatile than other types. Statistically safer investments include:

  • Bond funds
  • Money market funds
  • Index funds
  • Stable value funds
  • Target-date funds

Not everyone has the same level of risk aversion or tolerance, so it’s important to be honest with yourself about what you can handle. Keep in mind that while lower risk usually means lower returns, it can make all the difference in your peace of mind.

2. Diversify Your Portfolio

We’ve all heard that the most important thing to do to protect your investment portfolio is to diversify, diversify, diversify–and it’s true! At the retirement planning stage, continuing to diversify your portfolio helps to mitigate risk in an ever-changing market.

Consider different asset classes to broaden your investment mix, such as:

  • Real estate investment trusts (REITs)
  • International equities
  • Alternative investments like real estate and private equity (private investment in companies that are not publicly traded)

Or maybe you’ve heard about values-based investing and you want to see your own social or sustainable values reflected in your investments. Now is the time to thoroughly consider previous investments and explore new ones that will make your portfolio shine.

3. Review and Rebalance Regularly

While annual reviews can help you keep tabs on the overall health of your portfolio, now is the ideal time for an in-depth assessment of your investments.

Is one investment performing worse than it used to? Has another done exceptionally well over the years? Look at the returns and consider dropping low-performing investments or allocating more resources to others that have done well. Here are some specific questions to ask, either on your own or with your advisor:

  • How has my portfolio performed over the past year?
  • Am I on track with my financial goals?
  • What fees am I paying and what am I getting in return?
  • How has my net worth changed?
  • What areas should I focus on as I near retirement?


Adjusting your 401(k) investment strategy for retirement is a personal process that should take into account your risk tolerance, retirement goals, and financial situation.

Portfolio diversity and a move toward more conservative investments may make sense at this phase in life. You can better prepare for retirement by asking the right questions and taking action now.

If you’re unsure about adjusting your 401(k) investment strategy, a financial advisor or retirement specialist can help provide personalized advice based on your specific circumstances and retirement goals. At Better Money Decisions, we understand how important it is to have a sense of security as you prepare for retirement.

Are you ready to start the process of reviewing your own retirement investment strategy? Click “Schedule Now” on this page or contact a member of our team to get started with one of our knowledgeable advisors today!

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