Professionally managed portfolios that help you optimize investments for your target retirement date. And while that may sound ideal to many investors, there are advantages and disadvantages to consider. When a participant selects a target date fund, a portfolio manager will use the predetermined timeline to form an investment strategy for your funds based on when you plan to retire. #2: What are the advantages and disadvantages of target date funds? Just make sure your asset allocation and risk profile are in line with your retirement timeline and goals. Remember, your 401(k) investment is for the long haul. Having a diversified portfolio can help mitigate risk with market fluctuations. You can also diversify your investment mix at any point in time. When you’re ready, you can always increase the amount again. If you experience an emergency, job loss, or unexpected home repairs, you can always modify your retirement contribution to provide an extra cushion in your cashflow. However, life happens, and sometimes that includes unexpected expenses. You can, and should, increase your contributions if your budget allows to ensure that you can cover your day-to-day expenses in retirement such as medical expenses, a car payment, mortgage or rent, groceries, or travel. #1: Can I change my contribution or investments?Įmployer-sponsored 401(k) plans often have default for contributions, such as 3%, when you are enrolled. 
Read on for a list of five common 401(k) questions with answers to help you navigate your retirement. Whether you’re a new investor or not, it’s important to ask questions and understand your plan options so you can make adjustments throughout your retirement savings journey. Participating in a 401(k) plan is important for every retirement strategy.
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