401K Planning

The Investment Center, Ed Maher, CERTIFIED FINANCIAL PLANNER™

Your company offers a 401K plan, now what? According to Ed Maher, CFP® with The Investment Center at Citizens National Bank, the first step is to make sure you’re taking advantage if your company offers matching funds. Be sure you’re contributing the required amount to get the maximum allowable match. For instance, companies may off er a 3% match, meaning if you contribute 3% of your salary to the 401K plan, the company will in turn deposit that same amount into your plan. If they don’t have an employee match, you should still consider the most you’re able to contribute
monthly in order to have your account grow over time and whether you’re company is able to deposit those funds directly into your account pre-tax.

Once you have your contribution plan in place, you need to consider your investment strategy. According to Maher, “the best overall strategy is to be very aggressive when you’re young – 20’s and 30’s. Those age groups should be allocating their dollars to 100% stocks. As you get older, you need to add bonds to the mix.” Some plans have “target date programs” built in. Th e portfolios are set up based upon your current age and estimated retirement year. They automatically allocate your funds to more conservative options as you get older. “If your company doesn’t off er this option, you should work with a financial advisor to maximize the funds in your plan,” advises Maher.

As you get close to retirement you will need to consider what you plan to do with the money in your 401K. You’ll want to meet with a financial advisor to discuss your retirement plan and you’ll need to complete paperwork from your employer when completing a rollover. A check for the 401K funds will be issued to your broker for your benefit in rolling them into a retirement account. “If you are someone who likes to invest and do research and understand the market you can probably go with an online broker,” states Maher. “Otherwise, it’s a good idea to consult a professional who can guide you through the process and is aware of tax issues and penalties that will result if the rollover isn’t handled properly.”

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. -Securities offered through LPL Financial, member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.


Citizens National Bank and The Investment Center are not registered broker/dealers and are not affiliated with LPL Financial.

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