Gears icon with text, adjusting 401k and IRA contributions

Picture this: You’ve been saving for retirement, but when you set up those savings, you might not have known much about how to plan for retirement. Maybe you chose to divert a small portion of each paycheck to your employer-sponsored 401(k) or perhaps you’ve had an automatic monthly transfer headed toward your Individual Retirement Account (IRA) for as long as you can recall. Either way, you’ve been consistently socking away cash and investing in the market — and that is a win to begin with. But now, it’s a few years later, you’re at a new spot in your career, and your retirement plan hasn’t changed much.

The way you save for retirement can and should evolve as you grow and move through adulthood. As your income fluctuates, your personal life changes, and life events happen, it’s important to make sure your retirement accounts and contributions continue to make sense for you.

So, let’s look at when it makes sense to assess your retirement plan and when making some adjustments could be advantageous.

How often should you check in on your retirement plan?

No matter how you’re saving for retirement, whether you invest in a 401(k) or save with IRA certificates of deposit (CDs), for example, conducting regular yearly checkups is a good idea.

During your annual assessment, you might:

While you can always check in on your retirement accounts more frequently, it’s important to keep in mind that building your nest egg is a long game and growth occurs over time. So, you probably won’t see a lot of change in your savings if you check them frequently. Plus, if you invest in the market, there’s likely to be ups and downs and seeing those periodic dips can be discouraging or cause undue stress — which can lead to emotion-driven financial decisions. All that being said, checking in daily or even weekly is probably more than enough to stay in the know.

Just as well, you don’t want too much time to pass between check ins. One reason for that is when you invest, your asset allocation — or the balance between different types of investments like stocks and bonds — can shift due to market changes. When this happens, you may want to rebalance your investments to keep them in line with your risk tolerance and time horizon.

Adjusting Your Retirement Contributions

During your yearly check in, one of the most important aspects to consider is how much money you’re putting towards your savings — and if you need to increase or reduce that amount to stay on track with your retirement savings goals.

One rule of thumb is that you should aim to contribute 10% to 15% of your pre-tax income to retirement savings. That includes any amount you might receive through an employer match as well. If this number sounds like a lot, don’t panic. It’s okay if you aren’t able to save this much right away. Start with a percentage you can manage instead. Then, make it a priority to try to increase that number by at least 1% each year until you reach 15%.

Chances are, you might not even notice that 1% coming out of your paycheck now — but it could make a significant difference in the long run. If you have a company-sponsored 401(k), speak to your employer about auto-escalation plans to ensure your contributions are automatically increased each year. Otherwise, set an annual calendar reminder to speak to your employer or the institution where your IRA is held to make your increase.

Keep in mind, you may encounter circumstances throughout the years that prompt you to consider adjusting your contributions as well. For example, a significant increase in income could give you room to add extra monthly savings to your IRA. On the other hand, perhaps you take a lower salary in order to shift careers. In a scenario like this, you might temporarily decrease your contributions as you settle into a new situation.

Personal life events that can have a big impact on your finances, like marriage, divorce, or babies, will also likely spur you to examine your nest egg contributions. For instance, you and your spouse might choose to beef up your savings for a couple years early on in marriage, then reduce them slightly in lieu of college savings when you have children.

Finally, 401(k)s and IRAs have annual contribution limits set by the IRS. You can view those limits on the IRS website. If you have already been contributing the maximum amount and the limit increases, you might consider upping your savings as well. Similarly, if you’re age 50 or older, you can qualify for catch-up contributions — meaning you can boost your savings by a few thousand dollars each year if you choose.

Read more: Avoid these IRA mistakes (like contributing more than the IRS limit)

Taking the first step in saving for retirement is a big deal — and one you should be proud of. But building a nest egg isn’t a one-and-done process, and just like your career, income, and personal life will change over time, so should the way you save for retirement. So start with annual assessments, don’t be afraid to make tweaks when you need to, and remember that you are on the right track.

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