Part 2 – If you don’t know how to read a 401(k) statement, much less understand it, then you want to keep watching.

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How to Understand the Details on Your 401(k) Statement

Now that you know how to read and understand the account summary, or cover page, of your 401(k) statement, it’s time to dive into the details.
Specifically, the activity, transactions, fees, and investment options inside your 401(k) statement. This information is usually found on all the additional pages of your statement.

The details inside your 401(k) statement can be broken down into 6 sections:
1. 401(k) Account Activity
2. 401(k) Investment Activity
3. 401(k) Transaction Details
4. 401(k) Investment Fees
5. 401(k) Investment Performance
6. 401(k) Investment Options

401(k) Account Activity

This section includes:
• Your Activity By Contribution Type – This section may detail how much of your pay is going into your 401(k) and the maximum contribution you are allowed to put in for the year. In this example above, the employee is putting in 8% of each paycheck into the 401(k) plan. And, on a pre-tax basis. This means that contributions go into the account prior to any tax withholdings.

• Company Match – This is the amount of money your employer will put into your 401(k) for you each year. This is usually a percentage, up to a maximum amount, defined by the 401(k) plan. For example, if you put 3% of your pay into your 401(k), your employer may match 25%, 50% or 100% of this up to the same 3%. If you don’t know how much your company match is, ask HR for a copy of the 401(k) plan summary.

Your 401(k) Investment Activity
This section breaks down any activity of your current holdings for this period.
Here you can see what you are invested in, what the balances are of each holding, and what percentage of your future allocations will be added to these holdings.

401(k) Transaction Details
On your statement, you will have transaction details for every holding in your account in this section.

401(k) retirement plan Fees and Expenses
This section shows a detailed breakdown of fees that were directly debited from your account during the period.

401(k) Investment Performance

401(k) Investment Options

This part is where many investors get stuck.
Many 401(k) statements will have a list of all the available investment options for you to choose from.
Some plans start with as few as 10 investment choices, while others could have dozens of choices.
One of the biggest questions I have been asked over the years is, “How do I choose my 401(k) investments?”
This is where professional help comes in, and one of the reasons why 401(k) Maneuver was created.
Your adviser should be able to help you determine your tolerance to risk, how long it is until you retire, and any other information needed to choose the correct funds.
Not everyone is the same, nor should he/she be.
The chart starts with your available target date funds. As you can see, there are many different years.
Some plans today auto enroll you into the one closest to your retirement age, which may or may not be in your best interest. And for many good reasons. Like the difference in fees we discussed earlier, and the difference in performance over time.
You may also have similar charts that show Stock Funds, Bond Funds, and Money Market or Stable Value Funds. When you see all these, you may want to seek professional help.

401(k) Statement Disclosures
The last section on your statement will most likely be the fine print or disclosures of your 401(k) plan.
This could be several pages in length, and a good rule of thumb is, the longer your statement is, the more detailed the disclosures will be.
Your Next Steps
The above is a lot of information and why 401(k) investors need professional account management.
401(k) Maneuver provides independent, professional account management to help employees, just like you, grow and protect their 401(k) accounts.
Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that are hurting your retirement account performance.
With 401(k) Maneuver, you can go about your life doing what you love with confidence, knowing we are handling the changes for you.
If you’d like to see how professional account management may improve your 401(k) account performance, check out our calculator.
Have questions or concerns about your 401(k) performance? Click here to book a complimentary 15-minute call with one of our advisors: …(read more)

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