When to Use a 401K Calculator?

Answer 1

It is common for many adults to sign up for their employer-sponsored 401k retirement plan when they first start a job, then put their retirement planning efforts on cruise control. As long as the account is being funded through your own contributions and supplemented with an employer-matching contribution, you may think you are doing all you can to save for retirement. This is a great step to take toward planning for the future. However, monitoring this account regularly and making additional investments is often necessary to enjoy a more financially secure retirement.

Retirement Calculators

There are numerous retirement calculators that you can choose to use, and many of these retirement calculators are dedicated to 401k planning. You can use 401k calculators on a quarterly basis to ensure your retirement efforts are fully funded and that you are on track to meet your retirement goals. Keep in mind that the return on different investments will change over time. You may use a 401k calculator to determine if you need to contribute more money to your retirement plan or if you need to invest in different funds or stocks.

Beyond Your 401k

A great retirement plan is one that allows you to enjoy retirement income from several different sources. If you are contributing regularly to your 401k retirement account, you may be counting on your 401k to provide you with a large source of this income. Social Security income is another common source of retirement income. While you may use a 401k calculator regularly to ensure you are on track with your investments, you may consider other investments as well. For example, many retirement experts advise adults to invest in a Roth IRA. You may also consider purchasing an annuity, buying an income-producing property, buying CDs and more. These additional investments can help you to avoid being overly concerned with moderate but very common fluctuations in the balance of your 401k account. The more diversified your retirement plan is, the less likely you will be affected by market fluctuations. This should be taken into consideration if you are thinking about investing more money into your 401k account to account for account balance fluctuations.