Selecting the right 401(k) provider can be a game-changer for your business and your employees. The right provider ensures compliance, low fees, quality investment options, and a seamless employee experience. With so many options on the market, choosing wisely can save time, reduce costs, and improve employee satisfaction.

This guide explains the key factors to consider when evaluating 401(k) providers for your small business.

Why Choosing the Right 401(k) Provider Matters

A 401(k) plan is more than a retirement account—it’s a tool to attract and retain top talent. The wrong provider can result in:

• High fees that eat into employee retirement savings

• Poor investment choices

• Administrative headaches and compliance risks

On the other hand, the right provider helps your business:

• Offer competitive benefits to employees

• Maximize tax advantages for both the business and participants

• Stay compliant with IRS regulations

Key Factors to Consider When Choosing a 401(k) Provider

1. Fees and Transparency

• Look at administrative, recordkeeping, and investment fees.

• Ensure the provider clearly explains all costs.

2. Investment Options

• A good provider should offer diverse funds: stocks, bonds, target-date funds, and low-cost index options.

• Consider the performance history and long-term returns.

3. Employee Support and Education

• Your provider should offer educational resources, one-on-one guidance, and easy-to-use platforms.

• Employee engagement improves when participants understand their options.

4. Compliance and Administration

• Ensure the provider handles ADP/ACP testing, Form 5500 filing, and other compliance requirements.

• Providers that handle administrative tasks reduce stress for business owners.

5. Customization and Flexibility

• Look for a provider that allows you to tailor contribution options, matching formulas, and vesting schedules.

• Flexibility is important as your business grows or employee needs change.

Questions to Ask Potential Providers

When evaluating providers, consider asking:

• How are fees structured? Are there hidden costs?

• What investment options do you offer, and what are the historical returns?

• How do you handle compliance testing and reporting?

• What support and resources are available for employees?

• Can the plan grow with my business?

Working With a Trusted 401(k) Advisor

Even with the best provider, navigating 401(k) options can be overwhelming. Top 401(k) Advisors help small business owners:

• Compare providers and select the right fit

• Streamline administration and compliance

• Ensure employees have the best experience and resources

Choosing the right provider now can protect your employees’ retirement and your business’s future. Make An Appointment Today! 

As the year comes to a close, business owners face critical deadlines for their 401(k) plans. Proper year-end planning ensures compliance, maximizes contributions, and keeps your employees’ retirement goals on track. From contribution limits to plan design adjustments, these are the items you cannot afford to overlook before December 31st.

1. Review 401(k) Contribution Limits

Each year, the IRS updates contribution limits for 401(k) plans. For 2025:

• Employee deferral limit: $23,000 (under 50), $30,500 (50+)

• Total contribution limit (employer + employee): $66,000 (under 50), $73,500 (50+)

Ensure that all employee deferrals and employer contributions are aligned with these limits. Making adjustments now can help participants maximize their retirement savings.

2. Verify Employer Contributions

If your plan includes matching or profit-sharing contributions, now is the time to confirm that all employer contributions are calculated and scheduled.

• Check contribution formulas and eligibility requirements

• Ensure that highly compensated employees (HCEs) are contributing enough to pass nondiscrimination testing

3. Perform Nondiscrimination Testing

401(k) plans must pass ADP, ACP, and top-heavy testing annually. These tests ensure that highly compensated employees don’t benefit disproportionately.

• Conduct preliminary testing now to identify shortfalls early

• Make corrective contributions if necessary to avoid penalties

4. Send Required Notices to Participants

Year-end is also a key time to confirm that your plan meets notice requirements:

• Safe Harbor notices

• Automatic enrollment notices

• Qualified Default Investment Alternative (QDIA) notices

Failing to send these notices on time can trigger compliance issues and potential penalties.

5. Review Plan Design Changes

Year-end is a great time to evaluate your 401(k) plan’s structure. Consider:

• Increasing matching contributions to incentivize employees

• Adding or modifying automatic enrollment or auto-escalation features

• Reviewing investment options and fees to ensure the plan is competitive and cost-efficient

Even small changes now can have a significant impact on participation and retirement outcomes.

6. Confirm Administrative Deadlines

Ensure that all administrative tasks are on track, including:

• Contribution deposits for the year

• Form 5500 preparation (if applicable)

• Participant statements and disclosures

Meeting these deadlines keeps your plan in good standing and avoids IRS or DOL issues.

7. Meet with Your 401(k) Advisor

Finally, scheduling a year-end review with your 401(k) advisor is essential. They can:

• Evaluate your plan’s compliance and performance

• Identify opportunities to increase contributions or improve plan design

• Ensure your company is prepared for 2025 changes

Working with a trusted advisor helps business owners avoid costly mistakes and optimize retirement benefits for their employees.

Conclusion

The end of the year is a critical time for 401(k) plan compliance, contributions, and design adjustments. By following this year-end checklist, business owners can ensure they are on track, protect their company from compliance issues, and help employees maximize their retirement savings.

Don’t wait until the last minute—start your year-end 401(k) review today to make the most of 2025 and set your plan up for success in 2026.

Don’t Miss the Deadline: Why Your Required Minimum Distribution (RMD) Must Be Taken Before the End of the Year

What Is a Required Minimum Distribution (RMD)?

A Required Minimum Distribution (RMD) is the minimum amount most retirees must withdraw each year from their retirement accounts once they reach a certain age. These withdrawals are mandated by the IRS and apply to accounts such as:

• Traditional IRAs

• SEP IRAs

• SIMPLE IRAs

• 401(k), 403(b), and other employer-sponsored plans

RMDs exist to ensure that individuals eventually pay taxes on the funds accumulated in tax-deferred retirement accounts.

When Do You Have to Take Your RMD?

The End-of-Year Deadline

For most retirees, the RMD deadline is December 31 each year. Missing this date can result in a significant IRS penalty—25% of the amount that wasn’t withdrawn (which may be reduced to 10% if corrected quickly).

If you turned 73 this year (as of 2025), you have until April 1, 2026, to take your first RMD. Every year after that, your RMD must be taken by December 31.

How to Calculate Your RMD

Your RMD amount is based on:

1. Your account balance as of December 31 of the previous year.

2. Your IRS life expectancy factor, found in the official IRS tables.

For example, if your IRA balance was $500,000 on December 31, 2024, and your life expectancy factor is 25.6, your 2025 RMD would be roughly $19,531 ($500,000 ÷ 25.6).

Keep in mind:

• IRAs: You can take your total RMD from one or more IRA accounts.

• 401(k)s and other employer plans: You must take a separate RMD from each account.

Why It’s Important to Take Your RMD Before Year-End

1. Avoid Costly IRS Penalties

If you fail to withdraw your RMD by the December 31 deadline, you could owe a 25% penalty on the amount not withdrawn. Even though the penalty can be reduced if corrected promptly, it’s best to stay ahead of the deadline.

2. Manage Your Taxes Effectively

RMDs count as taxable income, which can impact your tax bracket, Medicare premiums, and eligibility for certain deductions. Taking your RMD strategically can help minimize your tax burden.

3. Keep Your Financial Plan on Track

Taking your RMD provides a great opportunity to review your full financial picture. You might consider:

• Using part of your RMD for qualified charitable distributions (QCDs).

• Reinvesting funds into a taxable investment account.

• Adjusting your withdrawal strategy for retirement income stability.

Strategies to Make RMDs Easier

Automate Your Withdrawals

Setting up automatic RMD withdrawals through your financial advisor or custodian ensures you never miss the year-end deadline.

Use Qualified Charitable Distributions (QCDs)

If you’re age 70½ or older, you can donate up to $100,000 per year directly from your IRA to a qualified charity. This counts toward your RMD and reduces your taxable income—a smart move for both your finances and philanthropy.

Reinvest What You Don’t Need

If your RMD exceeds your spending needs, consider reinvesting the funds in a taxable brokerage account or using them to rebalance your investment portfolio.

Key Takeaway

Before the year ends, make sure your Required Minimum Distribution is complete. Taking your RMD by December 31 helps you avoid penalties, stay tax-efficient, and keep your long-term financial plan running smoothly.

Schedule Your RMD Review with One of Our Financial Advisors Today!

If you have a 401(k) through your employer, you’re already taking a smart step toward building long-term financial security. But one term that often confuses employees is “vesting.”

So what exactly does vesting mean in a 401(k), and how does it impact your retirement savings? Let’s break it down in simple terms.

What Is Vesting in a 401(k)?

Vesting refers to the percentage of your employer’s contributions to your 401(k) that you actually own.

Your own contributions are always 100% yours—no matter how long you stay with your company. But the money your employer adds (through a match or profit-sharing) may be subject to a vesting schedule, meaning you need to stay employed for a certain amount of time before that money fully belongs to you.

Why Does Vesting Exist?

Vesting is designed to reward employee loyalty and retention. Employers use vesting schedules to encourage workers to stay with the company longer.

It’s a way of saying:

“If you stick around, you’ll earn full rights to the company’s contributions to your retirement.”

If you leave your job before you’re fully vested, you may forfeit part or all of the employer contributions—though you’ll always keep your own contributions and any investment earnings on them.

Types of 401(k) Vesting Schedules

There are three common types of vesting schedules, each with different rules for when your employer contributions become yours.

1. Immediate Vesting

With immediate vesting, employer contributions belong to you right away.

• If your company offers this, you can take 100% of your employer match with you if you leave tomorrow.

• Immediate vesting is common in organizations that want to attract and retain top talent quickly.

2. Cliff Vesting

Cliff vesting means you become fully vested after a specific period of time—typically one to three years.

• Before you hit the “cliff,” you don’t own any employer contributions.

• Once you reach that mark, you’re 100% vested all at once.

Example: If your company has a 3-year cliff vesting schedule, you’ll need to work there at least three years to keep all the employer-matched funds.

3. Graded (or “Graduated”) Vesting

Graded vesting lets you earn ownership gradually over time.

• You might gain 20% vesting per year until you’re fully vested at year five, for example.

• This approach rewards employees incrementally for staying longer.

Example:

What Happens to Unvested Funds If You Leave Early?

If you leave your job before becoming fully vested, you’ll forfeit the unvested portion of your employer’s contributions.

However, you’ll still keep:

• Your own 401(k) contributions

• Any investment gains earned on your contributions

• Any vested employer contributions

Those vested funds can be rolled over into your next employer’s 401(k) plan or into an IRA.

How to Check Your Vesting Status

You can find your current vesting information by:

• Reviewing your 401(k) statement or online portal

• Asking your HR or benefits department for details

• Checking your Summary Plan Description (SPD) — it outlines your company’s vesting schedule in detail

Knowing your vesting status can help you plan career moves strategically—especially if you’re close to becoming fully vested.

Why Vesting Matters for Your Financial Future

Understanding vesting can make a big difference in your long-term savings. For example:

• Leaving a job just a few months before becoming fully vested could mean losing thousands of dollars in employer contributions.

• Staying a bit longer could ensure that money becomes yours for life.

It’s not just about working longer—it’s about maximizing your earned benefits and protecting your retirement nest egg.

The Bottom Line: Know When Your Money Becomes Yours

Vesting is your key to understanding when employer contributions to your 401(k) truly belong to you.
By checking your company’s vesting schedule, you can make smarter career and retirement planning decisions—ensuring that you keep as much of your hard-earned money as possible.

Need Guidance with Your 401(k) or Retirement Plan?

At Top 401(k) Advisors, we help you make the most of your retirement savings—from understanding your 401(k) benefits to building a personalized investment strategy that supports your goals.

Let’s secure your financial future together.
Contact us today to schedule your complimentary retirement planning consultation.

Changing jobs is an exciting step in your career, but it often raises questions about your 401(k) retirement savings. Many employees wonder: “Do I have to cash out my 401(k)? Can I take it with me? What are my options?”

This guide explains what happens to your 401(k) when you leave a job, your choices for managing your retirement funds, and tips to make the transition smooth.

What Happens to Your 401(k) When You Leave Your Job?

When you leave an employer, your 401(k) account doesn’t disappear — the money you’ve saved remains yours. However, how you manage it depends on several factors, including your account balance and your new employer’s plan.

Vested vs. Unvested Contributions

• Vested Contributions: These are funds that fully belong to you, including your contributions and any employer match you’ve earned according to your vesting schedule. You can take these with you when you leave.

• Unvested Contributions: If you leave before fully vesting, you may forfeit a portion of your employer match. Your personal contributions are always yours.

Your Options for Managing Your 401(k) After a Job Change

When you change jobs, you typically have four options for your 401(k):

1. Leave the 401(k) with Your Former Employer

• You can keep your funds in your previous employer’s plan if the balance is above a minimum (usually $5,000).

• Benefits: No immediate taxes or penalties.

• Drawbacks: Limited access to investment choices and less control over the account.

2. Roll Over to Your New Employer’s 401(k) Plan

• If your new employer offers a 401(k), you can roll over your old balance into the new plan.

• Benefits: Consolidates accounts, continues tax-deferred growth, and often keeps you invested in a familiar platform.

• Drawbacks: Some plans have limited investment options or higher fees.

3. Roll Over to an IRA

• You can roll your 401(k) into a Traditional or Roth IRA, depending on your tax strategy.

• Benefits: Greater investment flexibility, potential for lower fees, and continued tax-deferred growth.

• Drawbacks: Must follow IRS rollover rules to avoid taxes and penalties.

4. Cash Out Your 401(k)

• You can withdraw the funds in a lump sum, but this is generally not recommended.

• Consequences: You’ll owe income taxes and, if you’re under 59½, a 10% early withdrawal penalty. Cashing out can significantly reduce your retirement savings.

Things to Consider Before Making a Decision

Taxes and Penalties

• Avoiding taxes and penalties is crucial. Direct rollovers into a new 401(k) or IRA are typically tax-free.

• Indirect rollovers (receiving a check first) may trigger taxes if not completed within 60 days.

Investment Options

• Compare investment choices, fees, and performance between your old plan, new plan, and IRAs.

Convenience and Management

• Consolidating your retirement accounts can make it easier to track your savings and stay on top of your retirement goals.

Tips for a Smooth 401(k) Transition

1. Review your old plan documents to understand your options and any deadlines.

2. Check your new employer’s 401(k) plan for eligibility and investment options.

3. Consult a financial advisor if you’re unsure about rollovers, taxes, or investment choices.

4. Avoid cashing out unless it’s an absolute necessity.

The Bottom Line

Changing jobs doesn’t mean losing your 401(k). You have several choices: leave it, roll it over to a new 401(k), roll it over to an IRA, or cash it out — though cashing out is rarely the best option. Making an informed decision can protect your retirement savings and keep you on track toward your long-term goals.

At Top 401k Advisors, we help clients navigate 401(k) rollovers, tax implications, and investment decisions, ensuring your retirement savings work as hard as you do.

Need Help With Your 401(k)? Make an Appointment!

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.

Make an Appointment Today! 

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.

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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.