Offering a 401(k) plan is one of the best ways to attract and retain great employees — but as a business owner, it also comes with fiduciary responsibilities under federal law. Understanding these duties is critical to staying compliant, protecting your business, and ensuring your employees’ retirement savings are managed properly.

In this article, we’ll break down what fiduciary responsibility really means, the legal obligations plan sponsors face, and how you can limit liability while maintaining a compliant, high-quality retirement plan.

What Is a 401(k) Fiduciary?

A fiduciary is any individual or entity that manages or exercises authority over a 401(k) plan’s assets, or has influence over decisions made on behalf of participants.

In most small businesses, the plan sponsor — usually the owner or key decision-maker — automatically becomes a fiduciary. If you select the investment options, approve plan changes, or oversee administrative duties, you’re acting in a fiduciary capacity.

The Core Fiduciary Duties of a 401(k) Plan Sponsor

1. Duty of Loyalty

You must act solely in the best interest of plan participants and beneficiaries. That means all decisions — from choosing investment options to approving service providers — must benefit your employees, not your business or personal interests.

2. Duty of Prudence

Plan sponsors must make decisions with the care, skill, and diligence that a knowledgeable expert would use. This includes regularly reviewing investment performance, understanding fees, and documenting all plan decisions.

3. Duty to Diversify Investments

Fiduciaries are required to offer a diversified mix of investment options to minimize the risk of large losses. This helps protect participants’ retirement savings from being overly dependent on one type of investment or market condition.

4. Duty to Follow Plan Documents

Every 401(k) plan operates under a written plan document that outlines how it should be managed. Fiduciaries must strictly follow those rules unless they conflict with federal law.

5. Duty to Monitor Service Providers

If you hire third-party administrators, recordkeepers, or investment managers, you must regularly monitor their performance and fees. Hiring an expert doesn’t remove your fiduciary responsibility — you still have to ensure they’re acting in your plan’s best interest.

Legal Obligations and Potential Liability

The Employee Retirement Income Security Act (ERISA) governs 401(k) fiduciary responsibilities. Under ERISA, fiduciaries can be held personally liable for losses to the plan resulting from a breach of duty.

That means if you make a decision that harms participants — even unintentionally — you could be required to restore any losses and face legal penalties. Common fiduciary violations include:

• Failing to monitor investment fees

• Offering poorly diversified investment options

• Using plan assets for business purposes

• Delaying contributions to employee accounts

• Not properly documenting plan decisions

How Business Owners Can Limit Fiduciary Liability

1. Partner with a 3(38) Investment Manager or 3(21) Advisor

Working with a qualified financial advisor or third-party fiduciary can offload some of your fiduciary responsibilities. A 3(38) advisor assumes discretion over investment decisions, while a 3(21) advisor provides guidance and recommendations but leaves final authority with you.

2. Keep Detailed Documentation

Always document meetings, decisions, and the rationale behind plan changes. Clear records help prove that you acted prudently and in good faith.

3. Conduct Regular Plan Reviews

Review investment performance, fees, and provider services at least once a year. Benchmarking your plan against industry standards helps ensure competitiveness and compliance.

4. Educate Yourself and Your Team

Fiduciary education can reduce risk and improve confidence in managing your 401(k) plan. Many financial advisors and plan providers offer complimentary fiduciary training sessions.

Why Fiduciary Compliance Matters

Beyond legal protection, strong fiduciary practices build employee trust. When workers know their retirement plan is managed responsibly, it improves morale, retention, and overall engagement.

Plus, maintaining compliance reduces the chance of costly audits or lawsuits — helping you focus on running your business instead of managing legal issues.

Final Thoughts

Being a 401(k) plan sponsor is both a privilege and a responsibility. Understanding and upholding your fiduciary duties not only protects you from liability but ensures your employees’ financial futures are in good hands.

If you’re unsure whether your plan meets fiduciary standards, or want to explore ways to reduce your liability, Cornerstone Portfolios can help you assess your current setup and implement strategies to strengthen your plan oversight.

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One of the most common retirement planning questions we hear is: How much should I contribute to my 401(k)? While the answer depends on your income, goals, and retirement timeline, there are some general guidelines that can help you maximize your savings.

At Cornerstone Portfolios, we help individuals and families build a retirement strategy that fits their financial future. Here’s what you need to know about 401(k) contributions.

What Is a 401(k) Contribution?

A 401(k) is a retirement savings plan offered by employers that allows you to contribute pre-tax or Roth (after-tax) dollars directly from your paycheck. Contributions can grow tax-deferred (traditional) or tax-free (Roth), making it one of the most effective ways to save for retirement.

How Much Should You Contribute to Your 401(k)?

The General Rule of Thumb

Financial experts often recommend contributing 10%–15% of your income toward retirement, including your employer match if available.

Start With Your Employer Match

If your employer offers a 401(k) match, contribute at least enough to get the full match. For example, if your employer matches 4%, and you only contribute 2%, you’re leaving free money on the table.

Aim to Max Out If Possible

In 2025, the IRS contribution limit is:

• $23,000 if you’re under age 50

• $30,500 if you’re age 50 or older (includes the $7,500 catch-up contribution)

If your budget allows, maxing out your 401(k) can significantly boost your retirement savings.

Factors That Affect How Much You Should Contribute

Your Age and Retirement Timeline

Younger investors can start small and increase contributions over time, while those closer to retirement may need to contribute more aggressively.

Your Other Financial Goals

Balancing student loans, saving for a home, or building an emergency fund might affect how much you can contribute today — but consistency is key.

Tax Benefits

Higher contributions can lower your taxable income if you’re contributing to a traditional 401(k).

Strategies to Increase Your 401(k) Contributions

• Start small, then increase yearly — even 1% increases add up over time.

• Use raises or bonuses to boost your savings without affecting your take-home pay.

• Review your plan annually to make sure your contributions align with your long-term goals.

Get Guidance for Your 401(k) Strategy

Deciding how much to contribute to your 401(k) doesn’t have to be complicated. At [Your Firm Name], we help you evaluate your options, create a retirement savings plan, and make sure you’re on track for the future you want.

👉 Contact us today to schedule a consultation and take the guesswork out of your retirement savings.

Saving in your 401(k) is one of the most effective ways to prepare for retirement. But what happens if you need that money sooner? Normally, withdrawing from a 401(k) before age 59½ comes with a 10% early withdrawal penalty, plus income taxes. However, there are several exceptions that allow you to access your funds penalty-free.

Below, we’ll cover the rules, exceptions, and strategies you need to know.

The Standard 401(k) Withdrawal Rule

Under IRS guidelines, you can begin taking money from your 401(k) without penalty at age 59½. Withdrawals will still be taxed as ordinary income, but you’ll avoid the additional 10% early withdrawal penalty.

Penalty-Free 401(k) Withdrawal Exceptions

1. Separation From Service After Age 55

If you leave your job (whether through retirement, layoff, or termination) in or after the year you turn 55, you may withdraw from that employer’s 401(k) without penalty.

Note: This rule applies only to the 401(k) at your most recent employer, not to old accounts from previous jobs.

2. Substantially Equal Periodic Payments (SEPPs / Rule 72(t)) 

The IRS allows you to take withdrawals through Substantially Equal Periodic Payments (Rule 72(t)). These are fixed, scheduled distributions that you must take for at least five years or until age 59½, whichever is longer.

This option can provide income if you retire early, but once you start, you must follow the rules strictly to avoid penalties.

3. Disability 

If you become totally and permanently disabled, you may qualify for penalty-free withdrawals from your 401(k). The IRS requires proper documentation and proof of disability.

4. Qualified Medical Expenses 

Withdrawals used to pay unreimbursed medical expenses that exceed 7.5% of your adjusted gross income (AGI) may be exempt from the 10% penalty.

5. Qualified Domestic Relations Order (QDRO)

In the case of a divorce, a QDRO may allow penalty-free distributions if funds are awarded to a spouse, child, or dependent.

6. First-Time Home Purchase (via IRA Rollover)

While 401(k) plans don’t allow penalty-free withdrawals for a first-time home purchase directly, you could roll funds into an IRA. From there, you may withdraw up to $10,000 penalty-free for a qualifying first-time home purchase.

7. Other Special Situations 

• Military service withdrawals

• Birth or adoption expenses (up to $5,000 per child under the SECURE Act)

• IRS levy withdrawals

Required Minimum Distributions (RMDs)

Once you reach age 73 (as of 2025 under SECURE Act 2.0), you must begin taking Required Minimum Distributions (RMDs). These withdrawals are mandatory but penalty-free.

Geo-Specific Note on Taxes

While the IRS sets federal withdrawal rules, state taxes may also apply to your 401(k) distributions.

For example:

• In Pennsylvania, most retirement income (including 401(k) withdrawals after age 59½) is not subject to state income tax.

• In California, 401(k) withdrawals are taxed as ordinary income in addition to federal tax.

Tip: Always check your state-specific 401(k) withdrawal rules or speak with a financial advisor in your area to avoid surprises.

Final Thoughts

Withdrawing from your 401(k) without penalty is possible—but the rules are strict. If you’re under 59½, make sure you understand whether you qualify for an exception before tapping into your retirement savings.

A smart withdrawal strategy can help you access the money you need while still protecting your long-term financial future.

Need Help With Your 401(k)? Contact Us Today! 

September 5th marks National 401(k) Day, a reminder to pause and think about one of the most important tools for building long-term wealth. While saving for retirement might not always feel urgent, the earlier you begin contributing to your 401(k), the greater the benefits. That’s thanks to one powerful financial principle: compounding.

What Is Compounding?

Compounding is the process of earning returns not only on your original contributions but also on the interest and growth your account has already generated. Over time, this snowball effect accelerates your retirement savings.

For example, if you invest $5,000 and it earns a 7% annual return, you don’t just earn 7% on your initial $5,000 each year. You also earn 7% on the interest accumulated from previous years. The longer your money is invested, the more dramatic this effect becomes.

Why Starting Your 401(k) Early Matters

Small Contributions Add Up Over Time

Even if you can’t contribute a large amount right away, starting early allows small, consistent contributions to grow into a substantial nest egg. Waiting even a few years can cost you hundreds of thousands of dollars in potential earnings.

The Advantage of Employer Matching

Many employers offer a 401(k) match—essentially free money added to your retirement savings. Starting early means maximizing the amount of employer contributions you receive throughout your career.

Beating Inflation and Market Fluctuations

The earlier you invest, the more time your 401(k) has to weather short-term market ups and downs. Compounding helps smooth out volatility, giving your money the potential to grow steadily over decades.

A Quick Example of Compounding in Action

Imagine two people:

• Alex starts saving at 25, contributing $500 a month until age 65.

• Taylor starts at 35, also contributing $500 a month until age 65.

Even though Alex only saved for 10 extra years, the earlier start means their account balance at retirement is significantly larger—often by hundreds of thousands of dollars. That’s the magic of compounding.

How to Take Advantage of Compounding Today

Increase Your Contributions Gradually

If you can’t max out your 401(k) today, start small and increase your contributions by 1% each year.

Take Full Advantage of Employer Matching

Make sure you’re contributing at least enough to get the full match—it’s the easiest way to boost your savings.

Stay Consistent

The biggest mistake many people make is stopping contributions when finances get tight. Even small, steady contributions keep compounding working in your favor.

Final Thoughts

On this National 401(k) Day, September 5th, take a moment to reflect on your future. The power of compounding means the earlier you start, the less you’ll have to contribute over time to reach your retirement goals. Whether you’re just beginning your career or already a few years in, today is the perfect day to evaluate your 401(k) and commit to building long-term financial security.

Need Help With Your 401(k)? Contact One of Our Professionals Today! 

When it comes to retirement planning, choosing the right investment strategy is one of the most important financial decisions you’ll make. Many investors turn to target-date funds (TDFs) as a convenient, set-it-and-forget-it option. But are target-date funds really a good choice for you? Let’s break down how they work, their pros and cons, and who they’re best suited for.

What Are Target-Date Funds?

Target-date funds are mutual funds or exchange-traded funds (ETFs) designed to automatically adjust their asset allocation based on a specific retirement date. For example, if you plan to retire in 2050, you might choose a “2050 target-date fund.”

How They Work

• Early on, the fund invests more heavily in stocks to encourage growth.

• As the target year approaches, the fund gradually shifts toward bonds and cash equivalents for stability.

• The process is guided by a “glide path”, which dictates how aggressively or conservatively the fund allocates assets over time.

Pros of Target-Date Funds

Target-date funds offer several benefits that make them attractive to retirement savers.

Convenience

Investors don’t need to constantly rebalance their portfolio—the fund does it automatically.

Diversification

TDFs typically hold a mix of stocks, bonds, and sometimes alternative assets, offering broad market exposure.

Professional Management

Fund managers handle allocation and adjustments, so you don’t need to monitor market trends daily.

Cons of Target-Date Funds

While target-date funds have advantages, they’re not perfect for everyone.

One-Size-Fits-All Approach

The glide path may not match your personal risk tolerance or financial situation.

Fees Can Add Up

Some TDFs have higher expense ratios compared to index funds, which can eat into long-term returns.

Limited Flexibility

You can’t easily adjust the asset mix—you’re tied to the fund’s preset path.

Who Should Consider Target-Date Funds?

Target-date funds can be a smart option for certain types of investors:

• Beginner investors who want a simple retirement strategy.

• Busy professionals who prefer hands-off investing.

• 401(k) participants where TDFs are often offered as default options.

On the other hand, if you prefer more control over your portfolio or have unique financial goals, you may be better served by building a custom mix of index funds.

Alternatives to Target-Date Funds

If you’re not sure TDFs are right for you, here are some alternatives:

• Index funds or ETFs for lower costs and more customization.

• Robo-advisors that adjust portfolios based on your risk profile.

• DIY investing if you enjoy managing your own allocations.

Final Thoughts: Are Target-Date Funds a Good Option?

Target-date funds are a convenient, diversified, and professionally managed solution for retirement investors—especially those who prefer a hands-off approach. However, they may not fit everyone’s unique needs. Before investing, consider your risk tolerance, fees, and retirement goals to decide if a target-date fund aligns with your financial strategy.

Need Help With Your 401(k)? Schedule An Appointment Today!

One of the smartest ways to grow your retirement savings is by taking advantage of your employer’s 401(k) match. But many employees wonder: “How much do I actually need to contribute to get the full match?” Let’s break it down.

What Is a 401(k) Employer Match?

An employer match is essentially free money that your company contributes to your retirement savings when you contribute to your 401(k).

How Employer Matching Works

• Employers typically match a percentage of your contributions up to a set limit.

• For example, a common match is 50% of your contributions up to 6% of your salary.

Why the Match Matters

• If you don’t contribute enough to get the full match, you’re leaving free money on the table.

• Over time, the match (plus compounding growth) can make a big difference in your retirement savings.

How Much Should You Contribute to Get the Full Match?

Example of a 50% Match Up to 6%

If you earn $60,000 and your employer matches 50% up to 6%, here’s how it works:

• You contribute 6% of your salary ($3,600).

• Your employer adds 3% ($1,800).

• Total contribution = $5,400 for the year.

Example of a Dollar-for-Dollar Match

If your employer matches 100% of your contributions up to 5%:

• You contribute 5% of your salary.

• Your employer contributes the same 5%.

• On $60,000, that’s $3,000 from you and $3,000 from your employer = $6,000 total.

How to Find Out Your Employer Match Policy

Check Your Benefits Handbook

• Employers outline the match details in your benefits or HR packet.

Ask HR or Payroll

• If it’s unclear, ask your HR department or benefits administrator to explain the matching formula.

Should You Contribute More Than the Match?

Getting the full match should be your minimum goal, but contributing more can accelerate your retirement savings. If you can afford it, consider increasing contributions beyond the match amount, especially if you’re aiming for long-term growth.

Key Takeaways

• The amount you should contribute depends on your employer’s specific matching policy.

• At a minimum, always contribute enough to get the full employer match—it’s free money.

• Review your benefits guide or speak with HR to understand your exact match.

• If possible, contribute more than the match to maximize your retirement savings.

Bottom Line:

To get the full employer match, you need to contribute the percentage of your salary that your employer requires—usually between 3% and 6%. At the very least, aim for that contribution, and if you can, increase it over time to build a stronger retirement future.

Need Help Planning Your 401(k)? 

Make An Appointment With One Of Our Advisors 

Introduction

The Question at Hand

• Is it worth contributing to a 401(k) when your employer doesn’t offer a match?

Purpose of This Guide

• Break down pros and cons.

• Help Pennsylvania residents (and U.S. readers) make an informed decision.

Understanding a 401(k) Plan

What Is a 401(k)?

• Employer-sponsored retirement savings account.

• Allows contributions from your paycheck before taxes.

Tax Advantages

• Contributions reduce taxable income for the year.

• Investments grow tax-deferred until retirement.

Automated Savings

• Payroll deductions create consistent savings.

• Encourages retirement-saving habits early.

Pros of Contributing Without an Employer Match

Compounding Growth

• Money grows over time through compound interest.

• Starting early maximizes retirement savings.

Tax Benefits

• Pre-tax contributions lower taxable income.

• Withdrawals in retirement taxed at potentially lower future rate.

Access to Investment Options

• 401(k) plans often include mutual funds, target-date funds, and diversified options.

• Offers professional management and simplified investing.

Cons of Contributing Without a Match

Opportunity Cost

• Contributions could be invested elsewhere (IRA or taxable accounts).

Fees

• Administrative or fund management fees may apply.

• Compare with other retirement options in Pennsylvania or your state.

Limited Flexibility

• Funds typically inaccessible before age 59½ without penalties.

Alternative Retirement Options

Roth IRA

• After-tax contributions grow tax-free.

• Greater investment flexibility than many 401(k) plans.

Traditional IRA

• Broader investment choices.

• Contributions may be tax-deductible depending on income.

Health Savings Account (HSA)

• Available with high-deductible health plans.

• Can serve as a tax-advantaged retirement account.

Tips for Pennsylvania Residents

State Tax Considerations

• Pennsylvania taxes 401(k) withdrawals at a flat 3.07%.

• Typically lower than federal taxes—important for retirement planning.

Local Investment Resources

• Work with Pennsylvania financial advisors familiar with state-specific rules.

• Explore programs to supplement retirement savings locally.

Final Thoughts

Why Contributing Still Makes Sense

• Tax benefits and compounding growth make contributions worthwhile.

• Starting early is key to maximizing retirement savings.

Consider Alternatives

• Explore IRAs or HSAs depending on financial goals and flexibility needs.

Action Step

• Start contributing now, even without a match—small amounts today can make a big difference in retirement.

Need Help With Your 401(k)?

Make an Appointment With One of Our Financial Advisors. 

Overview of the SECURE 2.0 Act and Its 2025 Impact

• Brief background on the SECURE 2.0 Act
• Why 2025 provisions matter for both employers and employees

Mandatory Automatic Enrollment for New Plans

How the New Rule Works

• Automatic enrollment rate between 3% and 10% of pay
• Annual automatic escalation requirements

Impact on Employees

• Benefits of starting retirement savings early
• Opt-out flexibility

Increased Catch-Up Contributions for Ages 60–63

New Catch-Up Limits in 2025

• Greater of $10,000 or 150% of regular catch-up limit
• 2025 limit = $11,250

Why This Matters

• Helps those nearing retirement boost savings in peak earning years

Student Loan Payment Matching

How It Works

• Employers match based on qualifying student loan payments

Benefits for Employees with Debt

• Builds retirement savings without reducing loan repayment

Expanded Access for Long-Term, Part-Time Employees

Updated Eligibility Requirements

• Reduction from 3 years to 2 years with 500 hours annually

Broader Participation Benefits

• Expands access to retirement savings for more workers

Higher Contribution Limits

2025 Employee Contribution Cap

• Limit increases to $23,500 for under age 50

Implications for Savers

• More tax-advantaged space for retirement savings

Automatic Portability of Small Balances

New Balance Threshold

• Balances up to $7,000 automatically rolled into new employer’s plan

Why This Helps

• Reduces lost accounts and consolidates retirement savings

Emergency Savings Accounts (ESAs)

ESA Limits and Rules

• Up to $2,500 post-tax, penalty-free withdrawals for emergencies

Benefits for Financial Security

• Encourages short-term savings to avoid retirement withdrawals

New Roth 401(k) Options

Employer Match into Roth

• Employees can choose Roth for employer contributions

RMD Changes for Roth 401(k)

• No Required Minimum Distributions during account owner’s lifetime

Reduced Penalties for Missed RMDs

 New Penalty Rates

• Reduced from 50% to 25%, or 10% if corrected quickly

Benefit to Retirees

• Less severe consequences for honest mistakes

Delay of Roth Catch-Up Requirement for High Earners

New Effective Date

• Roth catch-up requirement delayed until 2026

Impact on Employers and Employees

• Provides more time for payroll and plan adjustments

Deadlines for Employer Compliance

Implementation Timeline

• Must follow rules in 2025
• Plan amendments due by December 31, 2026

How Cornerstone Portfolios Can Help You Navigate These Changes

 Services for Employers

• Compliance reviews and plan design adjustments

Services for Employees

• Contribution strategy planning and education sessions

Final Thoughts

• The SECURE 2.0 Act brings big changes to 401(k) plans in 2025 — from higher contribution limits to new savings options and expanded access for more workers. Knowing these updates can help you save more, avoid mistakes, and make the most of your retirement plan.

Optimize Your 401(k) Plan for 2025

• The SECURE 2.0 Act brings important updates to 401(k) plans in 2025 — and knowing how they affect you can make a big difference. At Cornerstone Portfolios, we help you understand these changes and create a plan that fits your goals, so you can feel confident about your financial future.

Schedule a review with Cornerstone Portfolios

In today's competitive job market, employers are constantly seeking new ways to attract and retain top talent. While modern perks like pet-friendly offices and on-site gyms are appealing, traditional benefits like retirement plans remain vital in fostering long-term job satisfaction and loyalty.

A 2019 study highlights the enduring importance of retirement benefits, revealing that 68% of workers consider these benefits crucial in accepting a job. Moreover, 62% say that employer 401(k) match is essential to their retirement planning. Clearly, understanding and implementing an effective 401(k) matching strategy is a pivotal aspect of employee retention.

For those unfamiliar, 401(k) matching is a program in which employers match a percentage of an employee's contributions to their retirement plan. This match can range from 25% to 100% of the employee's contribution. For instance, an employer might offer a 50% match up to 6% of an employee's salary. If an employee earning $60,000 annually contributes 6% ($3,600), the employer would contribute $1,800.

The Role of Vesting Schedules

Employers often use vesting schedules as a way to ensure employee retention. This schedule allows employees to take full ownership of the matching contributions only after remaining with the company for a specified period. This approach discourages employees from leaving shortly after receiving a company match.

Benefits for Employers

For business owners, participating in a 401(k) program can offer personal financial advantages. They can contribute a substantial portion of their salary to their own 401(k), potentially lowering their tax bracket. Additionally, employer contributions to employee 401(k) accounts are tax-deductible on federal corporate income tax returns and often exempt from state and payroll taxes.

In essence, a well-structured 401(k) matching program enhances employee loyalty, boosts job satisfaction, and strengthens a company's reputation as a desirable place to work. This strategic benefit planning contributes to an organization's long-term success.

Employers looking to optimize their benefits strategy and potentially improve their 401(k) matching programs are encouraged to reach out for a consultation and ensure their approach aligns with employee expectations and business goals.

A solid 401(k) plan is a cornerstone of an attractive employment package. It’s not just a benefit; it’s an investment in your employees' futures and your company's ability to attract and retain top talent. But how well does your current 401(k) plan align with industry best practices?

Prioritize Financial Education and Guidance

Providing your employees with financial education and guidance is essential. Offer educational materials, seminars, and the option for one-on-one consultations with a financial advisor. When employees understand their retirement plan options better, they are more likely to make informed decisions that benefit their long-term financial health.

Implement Automatic Enrollment

Automatic enrollment can significantly enhance employee participation rates in your 401(k) plan. A study by the National Bureau of Economic Research found that automatic enrollment boosts participation by 80%. This feature helps ensure that more employees start saving for their retirement early and consistently.

Offer Matching Contributions

Matching contributions are a powerful incentive for employees to contribute more to their retirement accounts. Did you know that 62% of workers consider employer matching crucial for their retirement plans? On average, employers match 4.8% of employee contributions. By offering competitive matching, you encourage your workforce to save more, thereby securing their financial future.

Choose Plans with Low Fees

The fees associated with 401(k) plans can substantially impact the savings accumulated by employees over the years. Choosing plans with low fees enables employees to maximize their retirement savings. It's crucial to carefully review and compare plan fees to ensure you're providing the best options available.

Incorporating these best practices into your 401(k) plan not only aids in crafting a robust and attractive retirement benefit but also plays a vital role in promoting a secure financial future for your employees. Review your current 401(k) offerings today and consider upgrading them to align with these best practices.

For tailored assistance in optimizing your company’s 401(k) strategy, feel free to reach out to us.

With the new year in full swing, now is a great time to give your 401(k) a quick checkup. Here are three simple steps to ensure you’re on the right path:

1. Reassess Your Contributions – Are you contributing enough to reach your retirement goals? Consider increasing your deferral, even by 1%.
2. Optimize Your Investments – Market conditions shift, and so should your investment strategy. Review your asset allocation to ensure it still aligns with your risk tolerance and time horizon.
3. Double-Check Fees – High fees can eat into your returns. Review your plan’s expense ratios and investment costs to ensure you’re not overpaying.

A few small adjustments now can have a big impact on your future. Take five minutes today to review your 401(k) and stay on track!

Click here to schedule your appointment for review today!

Choosing between a Roth 401(k) and a Traditional 401(k) depends on your current and future tax outlook.

● Roth 401(k): Contributions are made with after-tax dollars, allowing tax-free withdrawals in retirement. This is a great choice if you anticipate being in a higher tax bracket later or value tax-free growth.

● Traditional 401(k): Contributions are pre-tax, reducing your taxable income now, but withdrawals in retirement are taxed. This option suits those in higher tax brackets today who expect lower income in retirement.

For many, a mix of both accounts offers flexibility and potential tax advantages in retirement.  Consider your goals and consult a financial advisor at Cornerstone Portfolios to make the best choice for 2025 and beyond!