(StatePoint) April Fool’s Day is just around the corner. Even in today’s socially-distanced environment, people are sure to attempt a few pranks to mark the day. As in normal years, the majority will be silly, some will be hilarious, while others will fall flat.
This year, try something different and celebrate 4/01(k) Day instead. To mark the occasion, Lincoln Financial Group is encouraging savers to test their knowledge on three common misconceptions about saving for retirement revealed in a recent survey of U.S. employees by Lincoln Financial and CivicScience:
• True or False: “Saving enough to meet the employer match is enough to keep me on track for a comfortable retirement.” This one is (most likely) false! An employer match (if offered) is a good place to start, but if you really want to make sure you have enough of a nest egg to retire when and how you want, a good rule of thumb is to save at least 10 to 15 percent of your salary.
• True or False: “Paying down my student loan debt as quickly as possible is more important than saving for my retirement.” This can be true…or false, depending on your situation. While you should not delay saving for retirement, it’s a good idea to speak with a financial professional to determine how to strategize paying off debt while also planning for your future. You can also use free tools like the debt calculator found at LincolnFinancial.com to help you make a plan for paying off debt.
• True or False: “I’ve thought about moving money from an old employer’s 401(k) into my current employer’s 401(k), but it seems like it would be too much of a hassle.” This one is false! While it is important to consider all options of your 401(k) platform prior to making a decision, the process for a rollover is typically very easy and brings multiple benefits. Instead of tracking investment selections, performance or statements for multiple accounts, for example, you’ll only have to monitor a single account.
“While there are certainly still some misconceptions when it comes to saving for the future, the majority of those surveyed understand the importance of not delaying saving for later in their careers,” said Aaron Moore, senior vice president, Retirement Plan Client Engagement, Lincoln Financial Group. “This is cause for celebration, as delaying saving for retirement can have a significant impact on future savings. This is another reason why we are focused on working with employers to educate their employees so they can achieve the retirement they envision.”
Tips to keep your celebration going
If you’re looking for more ways to celebrate 4/01(k) Day – and help set yourself up for a financially secure future – here are three tips to keep in mind:
1. Check your account. It might sound simple, but logging in regularly (try for at least once a quarter) can help ensure you’re on track with your savings goal. Be sure to use the calculators and projection tools your retirement plan offers.
2. Update (or create) a goal. When you have a goal to work towards, research shows you’ll be more likely to increase your contributions, and therefore, increase your savings.
3. Meet with a professional. If your employer offers retirement consultants, schedule a meeting, or consider speaking with a financial professional, who can help you understand the full picture of your savings and where to focus your efforts.
A comfortable financial future is something to celebrate. So this April 1, take stock of your retirement savings, starting with your 401(k).