How to Monitor a 401k

Putting your money in a 401k plan is just half of a good investment plan. The happiest investors are those who are actively involved in their investment and try to get the most out of it. It doesn’t require a day-to-day tracking but alertness is the key.

Instructions

Difficulty: Moderate

1. Keep an eye on your statement. Make sure that every dollar you invested has been credited accurately. Find out the exact date when you can expect your statement. Be aware of any delays.
2. If your employer matches your contribution, make sure it is credited properly.
3. Watch the performance of the company you have invested in. Scan analyst reports for any negative write ups about them. Investigate thoroughly if you find even the slightest hint of any discrepancy.
4. Get references from ex-employees if they have ever had any problems accessing their 401k after quitting.
5. Stay updated about changing laws, company policies and contribution limits. When you’re young try diverting the maximum possible amount into your 401k.
6. Review your investment allocation at least once a year. If you are not happy with the performance with your plan’s performance or if you want to change your risk profile, make the necessary changes.
7. Treat your 401k investment plan as any other investment plan. Frequent monitoring is critical.

Tips & Warnings

• Do not be trigger-happy with your plan--moving money around frequently. Every plan will have its ups and downs. The wise investor always takes a long-term view.
• Keep making changes to your risk profile according to your age. As you near retirement, you may want to adopt a low risk attitude towards your investment.
• Update your list of beneficiaries as and when you want.
• Not tracking your 401k could make you vulnerable to frauds by your employer and even expose you to an unsatisfactory investment.