One of the most important things you can do for your future is to save for retirement. At some point, you will no longer be working the same job you are in, and your income might drop. When that day comes, it helps to be prepared with a substantial nest egg that can help you live comfortably.
In order to live comfortably in retirement, though, you need to make efforts now. You might already have a retirement account set up, but are you contributing in an effective manner? It is important to consider your retirement account, and make necessary changes. Don’t get complacent about the state of your retirement portfolio; make sure to review your situation regularly.
Should You Increase Your Contributions?
One of the ways that you can streamline your finances and ensure that you are setting aside money is to automate your finances . The downside, though, is that it is easy to “set it and forget it” when it comes to automatic retirement account contributions. You might receive bonuses and raises at work, but not increase your retirement contributions. Perhaps you have paid off some debt, and now have more disposable income. Have your retirement account contributions changed to reflect that?
Take a look at your current contributions. Are you maxing out your contributions? If you aren’t, it might be time to look for ways to contribute more to your retirement account each paycheck. This is especially true if your income has been growing, or if you recently received a bonus. Before spending the increase, consider adding a little more to your IRA or 401k . You will thank yourself later.
Does Your Asset Allocation Still Make Sense?
Another thing to consider as you look at your portfolio is whether or not your asset allocation still makes sense. It’s easy to lose track of what funds you have, and what underlying investments are in those funds. You might also not have rebalanced your portfolio for a long time, and you might have an inappropriate mix of asset classes for your financial and retirement goals .
Pick a regular interval at which to review your investment portfolio. This can be every six months or every year as you approach retirement, or every two to five years if you are younger. Take a look at the mix of investments that you have, and determine whether it still makes sense. Your asset allocation is an important part of your retirement portfolio. Consider shifting your asset allocation  as you get closer to retirement, and think about selling funds that create too much duplication in any one asset class. Carefully consider your financial and retirement goals, and make sure that your retirement portfolio accurately reflects what you are trying to do.
As you get older, and closer to retirement, your financial needs are likely to change. It is important that you realistically consider whether or not your current retirement account contributions, and asset allocation, are doing an adequate job. Take the time to evaluate your position, and then make appropriate changes.
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