In the past few days, I’ve paid attention to my retirement accounts. Not sure what came over me, but I’d been debating making some changes, weighing short-term financial plans vs. retirement plans. So what have I done these past few days?
I examined (and modified) the asset allocation mix of my retirement portfolio. I have my rollover IRA, Roth IRA, and 401(k) all at Fidelity; with all my accounts with one firm, they could easily show me a nice pie chart of my asset mix. And it was definitely not what my goal mix was supposed to be! I am far enough away from retirement that I should have a pretty aggressive portfolio.
When I rolled over my old 401(k) to a rollover IRA, I didn’t really do much with the money. I invested some of the money in a target fund, and left the rest in “cash”, i.e. a really low returns money market account. It wasn’t until the other day, when I looked online and realized that my entire portfolio was way too heavy in short-term (i.e. cash) that I knew I had to do something to rebalance my portfolio. So I used some of the money in “cash” to buy more of the target fund. I’ll probably buy more of that later. I figure I can use a little dollar cost averaging to my favor! 😛
I also decided that I might as well contribute more to my 401(k). I had said that I was going to hold off increasing my contribution amount until I reached a goal amount in my savings accounts. But then I realized that was kind of a silly plan. I have enough extra cash in my checking account that I’ll still be able to continue my automatic savings plan even with a reduced net income. I also realized raising my contribution by just one percent doesn’t really impact my cashflow, and I know that the more I contribute now, the better! So, as of now, I’m contributing 5%, and getting matched on 4%. I might be increasing the amount even more in the near future, once I finish doing a few more calculations.
Have you checked on your retirement accounts recently?