It's National 401k Day! 3 Reasons That Matters

Alright, I know, there are just way too many “National _______ Day” things that come up throughout the year. My personal favorite irrelevant national day is National Ice Cream Day, because I am always looking for a reason to get ice cream (fun fact: July is designated as National Ice Cream Month, by President Ronald Reagan, so feel free to use that excuse in that 31-day window to indulge). But today (9/5/25) is National 401k Day, a day designated by the Plan Sponsor Council of America. And while that may cause an eye-roll from readers, I think it’s a great thing to bring awareness for American’s to their own retirement situation - Americans are notoriously underprepared for their own retirement.

All things retirement certainly can be filed under the “Boring” category: 401ks, IRAs, “pre-tax,” “RMDs.” It falls into the exercise in nutrition category, where things of today are easy to deprioritize because the value isn’t fully visible until far into the future. But some small actions taken between now and retirement can easily put one in a far more favorable position in those retirement years.

Here’s what you can do to get a status check on your 401k situation:

1. Check your contribution rate & employer match: This matters more than any other aspect. If you want to build your retirement (pre-tax), you must contribute to your retirement account. Check to see if your employer matches 401k contributions, and if so, the amount that they will maximally match your contribution is generally a good target for your minimum 401k contributions annually. (Ex: if they match 100% of contributions up to 5% of your salary, this means your 401k will see 10% of your salary value added to the account each year (5% from you, 5% from employer) at least, plus growth from it being invested.) If they don’t match at all, that’s ok. Still consider contributing an amount you can afford (you still have to eat and pay your month-to-month bills) though sizable and preferably increasing each year. You can contribute up to $23,500 ($1,958 per month if you contributed monthly) this year, which is a significant higher ceiling than a traditional IRA for contributions. Adding $2,000 additional each year only requires $166 per month redirected towards the 401k instead of your bank account, so if you contributed $3,000 last year, can you get that higher this year?

2. Check your allocation: Between helping clients organize / move 401ks, and even directly managing 401ks through our partner, Pontera, plan options for how your dollars can be invested inside the 401k are widely varied, so a “second opinion” is something I commonly get asked about and happily provide - these plans can be confusing! They also tend to have a set amount of target-date funds. A TDF is an investment vehicle that acts as a one-stop shop to align your portfolio allocation with your approximate retirement year, actively taking your investment risk profile on the sliding scale from the aggressive end (wealth growth) to the conservative (wealth preservation) end as your career blossoms, retirement age hits, and then post-retirement years. These are all good features, though most 401k plans do have their limits, usually disallowing individual stock holdings, or investing in anything aside from the sometimes-limited options inside the plan. Though make sure the allocation of how your dollars are invested make sense to you and are aligned with you investment goals. When was the last time you screened your 401k plan to make sure your investments match your goals?

3. Aggregate your 401ks: It’s fairly common for employees to find new jobs at different employers over their working careers, and for the 401k to be forgotten about. “It was only a few thousand dollars,” is a common response to the reasoning behind an employee not going through the effort to move their 401k. To be clear, you don’t need to move it. If you leave that employer, that 401k is still owned by you, you just likely cannot contribute to it any further, but it is yours. So, you could leave it be if you like the 401k plan, or you could move it to your new employer’s 401k plan (called a rollover), which costs you nothing but a little bit of time and effort. You can also move it to an IRA you hold outside of any employer, at a custodian like Charles Schwab, for example - also called a rollover, and also only requires some time and effort. I’m a big believer in aggregation of retirement accounts. Like all the stuff in the garage, keeping like-things organized together almost always makes it all easier to manage. I have combined into separate bins for mountain biking gear, hiking gear, skiing gear, just like I have for my retirement - my previous 401ks have made their way into my SEP IRA, where I contribute annually from my earned income. Do you have retirement accounts out there that you’ve forgotten about or neglected?

While these things are simple, they are not easy, particularly because many 401k companies make it painstakingly difficutl and time consuming to make any changes or rollovers to one’s 401k. They obviously have financial benefit to holding onto your assets for as long as possible, and they do have a fiduciary obligation to protect their investors’ best interests, though understanding and acting on those three pieces above can make strong positive impacts over the course of your 30+ year career.

Your HR team or 401k plan provider (both fiduciaries) are a great free resource for you to navigate these things to make sure your situation is completely understood by you, and you have things exactly as you want them. Your financial advisor is another great resource for these things as well. Not only do I provide free advice to my clients on their 401k, and the no-cost service of dealing with the 401k provider with you (phone calls, emails), but I offer direct management of their 401k. Some financial advisors like me do this, some don’t - but you should ask!

Vanguard published a study a few years ago highlighting the value of an advisor, potentially adding 3% of value to an investment portfolio over time. That’s a net positive even when considering the fee of the advisor - something to consider! I’m a strong believer in surrounding yourself with a network that supports. Family, friends, and professionals. You’ll incur costs (money, time, effort), but why go it alone when you can find a way to better enjoy your life? Sound interesting? Email me: [email protected] and we will come up with a plan to organize your retirement!