Another year down the tubes - how I blew my 401k!

“Hey Matt, how did you do this past year on your Fidelity 401k retirement plan? Did you make money or loose money?”

Isn’t it ironic that we kill ourselves all year with hundreds and hundreds of items on our TO-DO LISTS, yet I bet that very few (if any) of us had listed on our reminder lists to “monitor and review my 401k fund allocation.”

Mistake #1: Forgetting to put on your to-do list as a line item the review bi-monthly of your 401K.

We all work so darn hard to earn money, keep a good job, and contribute bi-monthly to an account to try to build a nest egg. Many employers (but not all) contribute and match a portion of your investments. It doesn’t matter what the percentage a company matches, any percentage is FREE MONEY, and only the fools don’t take advantage of this match.

Mistake #2: Not contributing as much as you possibly can with every paycheck. It’s tax-free and with the match … it’s FREE MONEY.

I’ll never forget, years ago a financial broker told my husband and I that “the average couple spends 3x more time planning a family vacation than in managing their own investments.” I can say, first hand, this is true. Why do we spend so little time in monitoring our finances and comparing funds? At Catalogs.com, we use Fidelity as our 401k plan of choice. What this means is that we have about 10 – 15 different mutual funds to pick from. That’s the problem with 401k’s … you pick some funds at the beginning of the year and forget them.

Mistake #3: Not comparing the fund percentage rates at least 4x/year, and re-allocating the funds based on the then current top performers.

According to AARP, paying atention to your 401(k) can really pay off.

One out of three employees who are eligible to join a plan don't bother to, and those who do join tend not to save enough, according to a Money Magazine report from last fall. And the vast majority of retirement plan participants who do buy into a 401(k) plan simply sign up and forget about it, reported the Pension Research Council early this year.

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