As 2023 winds down, now can be a good time to turn your attention to one of the most important pieces of retirement planning for many people: your 401(k) plan.

Since it's a hands-off account, it can sometimes get lost in the background of our everyday lives throughout the year. Use the end of the year to change this.

You don't have to complicate the process, but here are three things you should do before year-end to fine-tune your 401(k) a bit heading into 2024.

Someone putting a coin into a piggybank.

Image source: Getty Images

1. Check your asset allocation

Your asset allocation is the mix of stocks, bonds, cash, and other investments in your portfolio. Everyone has a different risk tolerance, retirement goals, and timelines, so your asset allocation should ideally reflect that as best as possible.

For example, someone risk-averse likely wouldn't want a portfolio full of small-cap stocks, someone decades away from retirement shouldn't be focused on bonds, and someone approaching retirement will probably prioritize preserving their money. It's all about your personal situation, and that could change with time. It's always good to make sure your portfolio suits you in the present.

That said, personal situations commonly stay the same, too. However, even if your initial portfolio was carefully balanced to match your situation, market movements can cause your initial asset allocation to shift. For example, if you're invested in your company's stock and it surges, it could begin accounting for more of your portfolio than you'd prefer.

Regularly rebalancing your portfolio can help maintain your preferred risk level and investment strategy, helping your financial goals remain on track.

2. Review your fees

I consistently find people surprised to find out how much they're paying in 401(k) fees. There are many great things about a 401(k), but that's one of the downsides. There are typically three broad fees: administrative, investment, and service.

Your plan provider charges administrative fees for things like bookkeeping and legal services, so there isn't too much you can do about that, since your employer chooses them. Service fees are specific to things like loans and investment advice, so people are typically more aware of them. Investment fees, however, can slide under the radar.

It's not that companies try to hide the fees, but it's easy to overlook their impact when you're talking about fractions of 1% in many cases. Investment options like target date funds or actively managed funds typically have higher fees than passive index funds, so review if the costs warrant the benefits.

The difference between paying 1% and 3% in annual fees for your 401(k) could (and likely will) equal thousands over time.

3. Get the most from your employer match

One of the better perks of a 401(k) is the employer match, because it's essentially like free money.

Generally, employers will match your 401(k) contributions up to a certain percentage. Whatever this percentage is should be the minimum you contribute to your 401(k) if possible. If your employer matches 3%, make 3% your minimum; if they match 5%, contribute 5%. Contributing anything less than the most your employer will match is leaving money on the table.

Let's suppose someone makes $100,000 annually, and their employer matches up to 4% of their 401(k) contributions. If that person only contributes 3% to their 401(k), they're missing out on an additional $1,000 employer match.

That may not seem like much present day, but you should think about how much that $1,000 could grow over time. According to the Rule of 72, an investment would only need to increase 7.2% annually to double in value in 10 years.

A dollar today could (and ideally will) be worth a lot more in retirement, so double-check that you're maximizing every bit of your employer match for the year if you're not already.