Open a 401(k) account, save pre-tax dollars into the plan, set on autopilot. These are the simple steps we usually encounter when working with investors that have an employer-sponsored retirement account. But many employer plans offer additional features that cannot only improve your portfolio allocation but your overall financial plan as well. Depending on your plan, there may be multiple opportunities if you take the time to review your documents. One of those documents is your Summary Plan Description (SPD). Your SPD may reveal additional opportunities in your plan that you may not be aware of, such as:
- Roth 401(k) savings option
Most investors are familiar with diversification from an investment standpoint but there’s also tax diversification that can play a pivotal role. Having different “buckets” of money offers further flexibility, especially as you start to transition from the accumulation phase to the distribution phase in retirement.
- The ability to save after-tax dollars
The after-tax savings feature can not only help increase your overall savings rate but eventually you may have the ability to convert those dollars to a Roth IRA.
- In-service withdrawal
Usually available after 59 ½, this feature allows funds to be transferred to an IRA while you are still employed. If your employer offers a limited investment menu, this may be worth looking into to help expend the asset classes and investment options for your portfolio.
- Brokerage window
Limited options and an in-service withdrawal are not available? Check for a brokerage window. This is a separate account attached to your 401k plan that allows you to buy and sell additional investment vehicles such as stocks, ETFs and more.
Don’t have the time to review all of the features in your plan? Don’t worry, we’re here to help.
At Executive Wealth Management, we have the unique ability to actively manage employer-sponsored retirement accounts. This ensures that your portfolio is coordinated and well balanced with any outside accounts you may have. We can also help analyze your various savings options to add further efficiencies to your overall financial plan. And, with our fully integrated reporting, you’ll have complete visibility on your total portfolio performance.
To learn more about our 401k GPS service, please visit our website at https://ewmadvisors.com/services/401kgps or contact us today at 810-229-6446 to schedule a no cost, no obligation initial meeting.
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Executive Wealth Management, LLC is a registered investment advisor with the securities and exchange commission. Reference to registration does not imply any particular level of qualification or skill. Advisory services offered by investment advisor representatives of Executive Wealth Management. Brokerage products and services offered by Registered Representatives of Private Client Services, LLC member FINRA/SIPC. Executive Wealth Management and Private Client Services are unaffiliated entities. Topics discussed in this article may not be appropriate for all individuals. It is important that you discuss your long-term care options with a qualified professional.