Your 401(k): don’t be an ostrich.

You have a confession: you quit opening your 401(k) retirement account statements a while back. We forgive you.

Now in the spirit of recovery and renewal, let’s move on to a higher plane, together. As our heads emerge from the sand, we’re uplifted by the sense that each of us can improve our situation – whatever it is. New hope stirs. Enlightenment dawns. Angels sing.

Sorry, it got away from us there, but the possibilities for improving your 401(k) are exciting. Let’s take a look, shall we?

If you’re employed…

Contribute enough to get all 401(k) matching funds your employer offers. In some cases, that’s as little as 5% of your gross salary. Otherwise you’re leaving money on the table. Never a good idea.

401(k) match got cut? Keep investing in your retirement no matter what. Decide between contributing to the 401(k) and an IRA (Individual Retirement Account) instead, then set aside as much as you can. That’ll pay off at tax time and retirement.

No 401(k) available? Pick an IRA and set up direct deposit from your paycheck. That’ll make sure you’re paying yourself first.

If you’re leaving a job (or it left you)…

Don’t cash out your 401(k), even if the balance seems small. You’ll have 20% withheld for income tax. Ouch. Then you’ll be hit with a whopping 10% tax penalty. Double ouch.

If you have at least $5,000 in a 401(k), you might be able keep it where it is. But why not slip it into something more comfortable. Something you control. Consider rolling your 401(k) into a no-fee IRA instead: more investing choices, no hidden fees and more.

Learn more about your choices in “How not to leave your 401(k) options behind.”

If you’ve got old 401(k) accounts…

Brush the dust off and consolidate them in a no-fee Rollover IRA. Unlike employer 401(k) plans, the best IRAs have broad investing choices and no hidden fees. Suddenly your “old” 401 (k) looks like a spring chicken.

If you’ve already taken care of these tasks, tell us where to send your gold star. Otherwise, hop to it. Then give yourself a little reward – maybe 401 of your favorite jelly beans.

Tags: 401(k), IRA, Retirement, Savings