When you save in an IRA, you can write out a check and fund your account quickly. But 401(k) contributions are deducted from your earnings, so if you want to ramp up your savings rate before the end of the year, that’s a change that will generally need to go through your payroll department.
In some cases, though, it can take a pay period or two for changes to your 401(k) election to go through. If you want to start having more money taken out of your paychecks, the time to inform your employer is now.
2. Make sure you’ve contributed enough to claim your full employer match
Because 401(k) plans have such high contribution limits, you may not be in a position to max yours out for the year. This especially holds true if you’re an average earner. It’s one thing to set aside $19,500 or $26,000 a year on a $120,000 salary, but if you’re earning a $60,000 salary, it’s a much harder ask.
Still, it definitely pays to contribute enough money to your 401(k) to be able to claim your full employer match — whatever it amounts to. If you need to increase your savings rate to make that happen, the time to act is, once again, now. If you give up part or all of your 401(k) match, you’ll effectively end up leaving free money on the table.
3. Assess your investment mix
Your 401(k) shouldn’t just sit in cash. Ideally, you’ll have your retirement plan invested in different funds. And now’s a good time to do a review of your investments and make sure they’re working for you.