Consistently funding a 401(k) plan is a great way to set yourself up for a secure retirement down the line. But simply putting money into your 401(k) isn't enough. It's also important to occasionally take a deeper dive into that account. With that in mind, here are three specific 401(k) moves you should aim to tackle before 2023 comes to an end.
1. Bump up your contribution for the year to snag your full employer match
If your employer offers a match for your 401(k) plan, that's free money that could go a long way toward helping you retire comfortably. So if you haven't yet contributed enough to your account to claim your 2023 match in full, try to increase your contribution rate immediately.
Keep in mind that you can't just walk into a bank, hand over $200, and ask for it to go into your 401(k) plan. Rather, that change will have to be processed through your payroll department.
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So let's say your employer will match up to $4,000 in contributions to your 401(k), and you've only been contributing $300 a month. If you want to increase December's contribution to snag your full match, talk to your payroll team now so there's time to make that change by Dec. 31.
2. Check on your account's performance
Maybe your 401(k) is up 6% this year. Maybe it's up more or less. Either way, it's a good idea to see how your 401(k)'s performance compares to that of the broad market. If there's a big discrepancy, you may want to take a closer look at your investments.
One easy way to see how the market is doing is to simply look up the S&P 500 index's price over the past year. That index is generally considered to be representative of the broad market. So if the S&P 500 is up 15% and your 401(k) is only up 3%, that should drive you to dig deeper.
You may have chosen investments that are very conservative for your 401(k) in order to minimize your risk. But if you stick to investments that underperform the market, you take on another risk, and it's not accumulating enough wealth to lend to the retirement you want for yourself.
3. See what fees you're being charged
You'll generally be looking at administrative fees with a 401(k) that you might get no say in. But the investments you choose for your savings will also determine what fees you end up paying.
Those are the fees you should take a look at in the coming weeks. If they're notably high, you may want to shift some of your investments -- for example, swap an actively managed mutual fund for a lower-cost index fund. Or, consider moving your money out of a target date fund, since the fees there may be considerable, too.
You may be busy in the coming weeks with things like holiday shopping and New Year's Eve plans. But take some time to make these essential 401(k) moves. A few changes in your account could pay off big time in the long run.
