You’ve spent decades putting money into your 401(k)—paycheck after paycheck, year after year. For many folks, it becomes the biggest pile of “future money” they own.
But here’s the thing: a 401(k) can be a great tool, and still need a tune-up before you retire.
Think of it like owning a dependable pickup truck. It may have gotten you where you needed to go for a long time, but before a long road trip, you’d probably check the tires, the oil, and the brakes. Retirement is that long road trip.
Below are seven practical items to review as you get closer to the finish line at work and the starting line of retirement—written in plain English, with the kind of common-sense checkpoints that can help you feel more confident about what you’ve built.
1) Are you contributing the right amount (and capturing the full match)?
This one is simple, but it’s often the easiest money to miss.
- If your employer offers a match, make sure you’re contributing enough to receive it. Not using the match is a bit like leaving part of your paycheck uncashed.
- If you’re 50 or older, you may be eligible for catch-up contributions. These can help close the gap if you started late or had years when saving wasn’t possible.
Relatable example: If your employer matches 50% of your contributions up to 6% of pay, and you only contribute 3%, you’re leaving part of that match on the table. Over years, that can add up.
Common pitfall: As retirement gets close, some people reduce contributions to “enjoy life now.” That’s understandable—college bills, mortgage, helping kids, you name it. But it’s worth running the numbers first. Often, the last 5–10 working years are some of your highest earning years, and potentially your highest saving years.
What to do next: Review your current contribution rate, confirm your match formula, and consider whether catch-up contributions fit your cash flow.
2) Is your investment mix still appropriate for your time horizon?
A 401(k) is not a “set it and forget it” crockpot. It’s more like tending a garden: some seasons are for growth, others are for protecting what you’ve grown.
As retirement approaches, many people ask:
- Do I have too much risk? (A big market drop right before retirement can be painful.)
- Do I have too little risk? (Being overly conservative too early can make it harder to keep up with inflation over a long retirement.)
There’s no one-size-fits-all answer. A smart approach depends on things like:
- How many years until you’ll start withdrawals
- Whether you have other income sources (pension, Social Security timing, rental income)
- How steady your spending needs will be
- Your comfort level during market ups and downs
Relatable example: Two neighbors both plan to retire at 65.
- Neighbor A has a pension covering most monthly expenses.
- Neighbor B will rely heavily on 401(k) withdrawals.
Same age, different risk capacity.
A note about target-date funds: Target-date funds can be a helpful “all-in-one” solution, especially for people who don’t want to manage multiple funds. Still, it’s worth understanding what you own. Some target-date funds stay more aggressive than others near retirement. The target year on the label doesn’t automatically mean it’s a perfect fit.
What to do next: Look at your current allocation (stocks, bonds, cash), compare it to your retirement timeline, and evaluate whether it still matches your goals and stomach for volatility.
3) Are you paying attention to fees (without obsessing)?
You don’t need to become a fee detective with a magnifying glass—but it’s wise to know what you’re paying.
401(k) fees typically show up in a few places:
- Fund expenses (expense ratios inside mutual funds)
- Plan administrative fees (recordkeeping, account maintenance)
- Advisor or service fees (if applicable)
Even small differences in costs can matter over time. The goal isn’t to find the “cheapest” option at all costs—it’s to make sure you’re paying reasonable fees for what you’re getting.
Relatable example: If two fund options are trying to do the same job (like broad U.S. stock exposure), and one costs more, it’s worth asking why. Sometimes a higher fee brings a different strategy; sometimes it’s just higher.
The common-sense approach:
- If your plan has a low-cost, diversified option that fits your needs, that can be a good sign.
- If your choices are expensive, you may still be able to build a solid portfolio—just be aware of the tradeoffs.
What to do next: Check your plan’s fee disclosures and the expense ratios of your main holdings. If something looks high, ask for help interpreting it.
4) Have you reviewed your Roth vs. pre-tax balance (and your tax picture)?
Many workers have a traditional, pre-tax 401(k). Some plans also allow Roth 401(k) contributions.
Here’s the plain-English difference:
- Pre-tax (traditional) 401(k): You may get a tax break now, and withdrawals are generally taxed later.
- Roth 401(k): You pay taxes now, and qualified withdrawals are generally tax-free later.
Neither one is “always better.” It depends on your situation—current income, expected future tax rates, and how you want to manage taxes in retirement.
Why this matters before retirement: As you shift from saving to spending, taxes can become one of your biggest controllable expenses. Having flexibility—money in different “tax buckets”—may give you more levers to pull later.
Relatable example: Some retirees like having:
- A pre-tax 401(k)/IRA for general income
- A Roth bucket for years with big purchases (roof, car) or unexpected expenses
- A taxable savings bucket for ready cash
That mix may create options when tax laws change or when your income varies.
What to do next: Review how much you have in pre-tax vs. Roth vs. taxable accounts. Consider whether adjusting future contributions could improve flexibility.
5) Do you have a withdrawal plan (not just a savings plan)?
Most 401(k) conversations are about contributions and growth. Retirement flips the script.
Now the big question becomes: How will you turn this account into steady, reliable income?
A withdrawal plan typically considers:
- Your expected retirement spending
- Other guaranteed or stable income sources
- How you’ll handle inflation
- How to respond if markets drop early in retirement
- Required Minimum Distributions (RMDs), when applicable
Sequence-of-returns risk (in everyday terms): If the market falls early in retirement while you’re taking withdrawals, it can do more damage than the same drop later. It’s not just the return—it’s the timing.
A practical way to think about it: Some retirees keep a “cash cushion” or short-term bond allocation—money meant to cover near-term spending—so they don’t feel forced to sell long-term investments in a down market. The right amount depends on your situation.
Relatable example: If you’re remodeling the kitchen in year one of retirement, you probably don’t want that money riding a roller coaster right up to the contractor’s invoice.
What to do next: Sketch out a basic retirement paycheck plan: where the first 12–24 months of spending would come from, and how the rest of the portfolio supports longer-term needs.
6) Are your beneficiaries and account details up to date?
This isn’t exciting, but it’s important.
401(k) beneficiary forms often override a will. That means if your beneficiary designations are outdated, your account could go to someone you didn’t intend.
Life changes that should trigger a review:
- Marriage or divorce
- Death in the family
- Children reaching adulthood
- New grandchildren
- Changes in estate planning wishes
Also confirm basics like:
- Your address, phone, and email
- Trusted contact information (many institutions allow this)
- Whether you have multiple accounts from prior employers that are hard to track
Relatable example: A beneficiary form filled out 20 years ago might still name a parent or an ex-spouse. It happens more often than people think—usually not from neglect, but from busy lives.
What to do next: Log in and review beneficiaries at least annually, and any time you have a major life event. If you have an estate attorney, coordinate updates so your plan is consistent.
7) Have you decided what to do with old 401(k)s when you retire (or change jobs)?
It’s common to have multiple retirement accounts scattered across past employers. Consolidation isn’t always necessary, but it’s worth reviewing your options.
Typical paths include:
- Leave it in the old plan (if allowed)
- Roll it into your new employer’s plan (if you’re still working)
- Roll it into an IRA
- Convert some amounts to Roth in certain situations (tax considerations apply)
Each option has pros and cons depending on:
- Investment choices and costs
- Convenience and account oversight
- Distribution rules and flexibility
- Creditor protection rules (these can vary by account type and state)
- Your tax strategy
Relatable example: Some people prefer one “main” retirement account because it’s simpler to manage and easier for a spouse or family member to understand. Others keep accounts separate intentionally—for example, to preserve certain plan features.
What to do next: Make a list of every retirement account you have, where it’s held, and what it’s invested in. Then compare your options side by side before moving anything.
Putting it all together: a simple pre-retirement 401(k) checklist
If you like having a one-page “what should I do next?” list, here you go:
- Contributions: Are you maximizing the match? Are catch-up contributions appropriate?
- Investments: Does your allocation match your retirement timeline and comfort level?
- Fees: Are costs reasonable for what you’re receiving?
- Taxes: Do you have a mix of pre-tax and Roth money? Does your plan coordinate with your broader tax picture?
- Income plan: Do you have a withdrawal strategy for the first years of retirement?
- Paperwork: Are beneficiaries updated? Is your contact info correct?
- Account structure: Do you know what you’ll do with old 401(k)s?
A final word (the calm, common-sense kind)
Retirement planning doesn’t have to be fancy to be effective. Most of the time, it’s the unglamorous habits—saving steadily, staying diversified, keeping costs reasonable, and having a plan for withdrawals—that do the heavy lifting.
And if any of this feels overwhelming, that’s normal. The transition from “accumulating” to “using” your 401(k) is a big change. A second set of eyes can help spot gaps, confirm what you’re doing well, and simplify the next steps.
This article is for educational purposes only and is not individualized investment or tax advice. Consider speaking with a qualified financial professional about your specific situation before making changes to your retirement accounts.