Most people have heard of 401(k) plans yet do not fully comprehend this unique retirement investing account. If your employer offers a 401(k), you are in a great position to invest for retirement with the assistance of a corporation. In fact, your employer might even match your 401(k) contributions dollar for dollar up to a certain amount of money.

It’s not a secret that 401(k) plans can become confusing. This is why it is beneficial to rely on an experienced financial advisor for guidance and you will be able to make well-informed decisions as to how your money is invested, when to make withdrawals, how to transfer funds when changing employers, account rollovers and more.

The Role of 401(k) Financial Advisors

There is a common misconception that anyone can manage their own 401(k) plan. In reality, it is in your interest to obtain professional assistance from a financial advisor who specializes in this area. This professional’s work will adhere to stringent ERISA fiduciary standards, setting the stage for you to benefit from an investing professional with years or even decades of experience managing money.

Your financial advisor will handle the heavy-lifting involved with managing such an account, as well as help you manage the financial risk of your 401(k) investments, ensuring your money is properly diversified and invested to reflect your unique preference for risk tolerance and ideal time for retirement.

Recognize the Fact That 401(k)s are Complex Investment Accounts

401(k) plans are not as straightforward as they seem. These plans require strategies designed custom to each individual client’s goals in a personalized manner. Your financial advisor will handle all of the plan’s amendments as time progresses. He or she will choose, monitor and alter the lineup of investments within the 401(k) account, then you will typically have check-in appointments to track the progress of your account and advise you of various investment options.

Take Full Advantage of Your Employer’s 401(k) Program

If your employer offers a 401(k) program, you can likely benefit from dollar-for-dollar matching contributions up to a certain limit. If applicable, it is wise to take advantage of this opportunity by maxing out your 401(k) contributions up to the dollar amount your employer matches. If you have any questions or concerns about this program or other details of your 401(k) retirement plan, ask your financial advisor. Teaming up with a professional in this field will help you make the most of your retirement money, process contributions and withdrawals and minimize your tax burden, paving the way for a rewarding retirement.

Matching contributions from your employer may be subject to a vesting schedule. Please consult with your financial advisor for more information.

401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty.

Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Any opinions are those of the author and not necessarily those of Raymond James.