At some point, we all want to retire comfortably.
Unfortunately, for many of us, we wish we started saving earlier, if at all.
Right now, more than half of recent retirees say they regret how they handled their retirement savings. In fact, according to a Nationwide survey, 55% of retirees have regrets about their saving strategy. About 28% said they should have started saving earlier. Another 13% said they regret not contributing more.
“Many recent retirees told us they wish they had saved differently, highlighting a critical truth: retirement planning isn’t just about setting a number—it’s about building a strategy that anticipates life’s changes and regularly revisiting that plan as life happens,” said Kevin Jestice, president of Nationwide Retirement Solutions, as quoted by 401KSpecialistMag.com.
Of course, in some cases, better planning, consistent action, and corrections with 401(k) managers and personal investment managers could have helped.
For many, if you’re still working and contributing to a 401(k), the good news is you have time to make any adjustments to your funds. But to make those adjustments, you should also be well aware of what to look for that needs correction.
For one, are you paying more in fees than you should?
Fees are one of the biggest — and most overlooked — threats to long-term retirement growth.
Many corporate retirement plans charge higher fees than necessary. And while a fraction of a percent may not seem significant, the impact can compound over time and reduce your savings considerably. In fact, an extra 1% in annual fees could cost you thousands of dollars.
Many of us have no idea this is happening – or how much it’s costing us.
To fix the issue, review your plan’s administrative fees. Compare them to low-cost alternatives. If you’re unsure where to look, your plan administrator or your own personal finance person may be able to help you the most.
Lower fees mean more of your money stays invested and working for you.
Two, are your investments consistently underperforming?
If so, you might want to make a change.
Granted, market fluctuations are normal. Your balance will rise and fall over time. However, if your 401(k) consistently lags behind major market benchmarks again and again, there may be a problem you should address immediately.
Underperformance can happen when you’re too invested in high-cost funds, you lack diversification, or your asset allocation needs adjusting.
Again, check in with your fund manager at work, and/or check in with your advisor.
Three, are you sure you’re not leaving free money on the table?
Max out your contributions to retirement accounts if you can.
Accounts with tax advantages – 401(k)s, IRAs, health savings accounts, etc. – are great ways to save and invest for the future. In many cases, contributions to these accounts can help cut your taxable income for the 2025 tax season. You have until April 15, 2026, to contribute the maximum amount for it to apply to your 2025 taxes.
Also, if your employer offers a match program, contribute enough to receive the highest employer match possible. You can also max out your health savings account if you have one. Let’s say your employer will match up to 6% of your salary; maximize that.
Consider this. Let’s say you earn $100,000 a year and that your employer will match 50% of your contributions up to 5% of your salary or $5,000. With your contribution and the employer match, $7,500 is saved every year. Over 30 to 40 years of that, you’ll have a solid balance.
Four, are you invested in the company’s default investment option?
If so, make a change.
If you never selected your own investments, your contributions are likely placed in your company’s default fund — often a Target Date Fund.
Target Date Funds are designed to automatically adjust risk as you age. For many investors, they’re a reasonable starting point. However, they can sometimes be too conservative and not greatly tailored to meet your financial goals.
Many investors prefer low-cost index funds that track the broader market.
For instance, Warren Buffett has repeatedly recommended investing in low-cost S&P 500 index funds for long-term growth. One example is the Vanguard S&P 500 ETF, which tracks the S&P 500 and provides exposure to hundreds of leading U.S. companies across multiple industries.
Five, is your portfolio well-diversified?
Diversification helps manage risk.
A well-diversified portfolio should include U.S. and international stocks and bonds, for example. Again, to really diversify well, check with your financial advisor.
Diversification is also vital for minimizing risk and maximizing returns over the long haul. Coach Suze Orman suggests using a mix of stocks, bonds, and other investment tools, such as real estate. She also argues it’s important to review and adjust your diversified portfolio, especially as you get closer to retiring. This is another reason to consult with a financial advisor.
Six, review your portfolio.
When it comes to building a healthy portfolio, there’s no such thing as set it and forget it. If so, you can really forget about a healthy portfolio or a solid retirement.
As I’m sure you’ve noticed, life can change really fast. Income can change. Goals can change. Markets change. So, your portfolio must change, too. If you haven’t reviewed your 401(k) in more than a year, it’s time for a check-in.
Again, check in with your company’s plan manager and a financial advisor.
Seven, have a checklist.
Ask yourself these key things today.
- Am I contributing enough to get the full employer match?
- Do I know the fees I’m paying?
- Is my portfolio diversified?
- Are my investments performing reasonably well?
- Do I know when I last did a check-up on my holdings?
If you answered no to any or all, make sure you know as soon as possible. Slight changes can greatly improve your retirement plans.
Look, you don’t need to overhaul everything overnight. You don’t need to become a market expert. You just need to stay engaged and remember this is your money, your savings, your retirement, your comfort level.
If none of that matters to you, do nothing.
But if it does, and we know it does for many, do your due diligence and improve. Check your contributions. Understand your fees. Ask questions. Make small adjustments when necessary. And before you know it, you’ll have a healthy 401(k).
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