iShares: Six Things to Worry about in Your 401(K) | Page 2 of 2 | ETF Trends

What to do: Every year you re-enroll in health and other benefits. Make reviewing your 401(k) plan part of your personal addition to that process.

  • Worry Number 5: You are obsessing over your 401(k).

Obsessing over the balance on a daily basis, however, is equally counterproductive. No portfolio will deliver positive results in every environment – nor are they designed to. A diversified portfolio in some environments may consider “success” a matter of resisting downdrafts and remaining in position for when the market swings back. Obsessing can lead to knee jerk reactions that undermine your long-term plan.

What to do: See Worry Number 4 above. Review your long term plan annually. Don’t let emotions override your strategic vision.

  • Worry Number 6: You are not thinking about income.

You are saving for retirement so you can spend in retirement. The closer you get to retirement, the more you need to get serious about how much income your savings can provide – and how you plan to convert those savings into an income stream.

What to do: You have to have some idea both of what your retirement expenses may be like and how well your savings stack up against them. There are tools available to help you do that and you can also work with your financial advisor.

Chip Castille, Managing Director, is head of BlackRock’s US & Canada Defined Contribution Group.