What Should I Do With My 401k Right Now? {2024 Update}

Written By Colin Kuehn  |  Retirement 

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Having a 401k is a great way to ensure that you have a safety net for your financial future. However, you may be wondering what to do with your 401k right now.

There are many different strategies that you can use to protect your retirement savings. You can also work with a financial planner to ensure that you make the most of your investments.

a red panic button

Don't Panic

Having a 401k is a good idea, but it can be a stressful experience when your balance starts to dwindle. The best advice is to stay the course, and to make sure your 401k is aligned with your financial goals. Using a financial planner can help.

The 401k isn't the only thing in your portfolio. Increasing your savings can be done with annuities, which are a great way to lock in a fixed rate of return. You might also want to consider switching your 401k to an IRA. This will give you more options and a chance to test the water.

Getting your hands on your 401k's best stock is a good idea, but it's not a good idea to get your mitts into every single investment. A better approach is to diversify your funds and invest them wisely. The biggest benefit of diversifying is that you will see a wider range of returns, and you are less likely to suffer a loss should the market deteriorate.

The market is a moving target, but there are a few things you can do to stay one step ahead of the game. The best way to do this is to make sure your 401k has a well-balanced mix of stocks, bonds and cash.

an investment chart showing growth over time

Keep Long Term Investment Strategy in Perspective

Investing is one of the best ways to generate wealth over the long haul. However, the stock market isn't always a sure thing. Luckily, there are strategies to help mitigate portfolio damage and maximize your 401k investment.

The most dependable investment strategy is to keep your long-term investment plan in perspective. This is best accomplished by staying on top of market developments. The stock market has endured for more than a century, but it isn't immune to short-term ups and downs. It's a good idea to be prepared for a market downturn, and it may be smart to reposition your 401k money to safer investments.

It's also a good idea to take a look at your savings rate, which is simply the frequency of your contributions. The average deferral rate has been trending downward over the last few years. This may be a sign that workers are struggling with high inflation. The best strategy is to find a reputable financial advisor and stick to your plan.

While a 401k may not be for you, a well-managed savings account is an excellent way to get you on the road to retirement.

gold bars for a precious metals IRA

Consider Precious Metals IRA

Buying precious metals in a self-directed IRA is a good option for investors who are looking to diversify their portfolio. But before you decide to go this route, you need to understand how it works. Investing in physical gold and silver is a great way to protect your wealth, but you should be aware that it's a lot more expensive than conventional IRA options.

To invest in a precious metals IRA, you'll need to open a new account and deposit funds. You'll need to find a custodian who will handle your gold investments. Some companies only accept palladium or platinum, while others offer a variety of products.

After you've chosen a company, you can start to transfer your current retirement funds into your new account. The process can take anywhere from 10 to 14 days. If you're transferring from an existing IRA, you can use your current IRA custodian to help you.

If you're opening a self-directed IRA, you'll need a custodian who can help you buy and store your precious metals. The custodian will work with you to select the products that you want, as well as the depository where you'll store your coins.

Try Not to Check Your 401k Everyday

Fortunately, most companies don't actually manage your retirement accounts. That betch is where your hard-earned money goes to work for you. Of course, some lucky few do the heavy lifting for you, while the rest of us toil away at their desks. In the process, they tack on a few nifty perks. The best part? In return for your hard-earned cash, they'll let you keep a hefty portion of your salary for life. This means no long commutes, no fender benders, and no grumpy bosses. Oh, and you won't have to worry about your 401k growing at a frantic pace.

The following is an abbreviated list of the aforementioned perks. The above series aren't for everyone, but they can make your life easier and/or more fun.

Consider Reblanacing Your Portfolio

Investing in a 401k or other retirement plan is a great way to build up a nest egg for retirement. The problem is that many people do not know how to rebalance their portfolio. This is especially true for investors who are nearing retirement.

A target asset allocation is the percentage of your overall portfolio that is invested in stocks, bonds, or other investments. The idea is that a more heavily weighted portfolio will generate higher returns over time.

The best way to maintain a target asset allocation is to rebalance your portfolio periodically. For example, every six months. However, some financial advisors recommend rebalancing your portfolio as often as once a quarter. The frequency of rebalancing is dependent on your specific needs and investment goals.

Rebalancing your portfolio involves selling some of your holdings and buying more of those holdings that are underweight. For example, if you have a 60% stock, 40% bond target asset allocation, you could sell 5% of your stocks and use the proceeds to buy underweight bonds.

Consider Reducing Your Contributions

401(k) plans are one way to build up your retirement savings. They allow you to defer tax on money you contribute until you're ready to use it. You can also get an employer match. This is like having free money. You can also take advantage of a saver's tax credit. For individuals, this is up to $1,000. If you're married, the credit is up to $2,000.

When it comes to reducing your contributions to your 401(k) right now, most financial advisors advise against it. They point out that market downturns can be bad for stocks, and you'll need to decide if you're willing to risk sacrificing your new savings to a drop in prices.

If you have questions, or need help, consider hiring a financial advisor. Or you can consult a 401(k) calculator. You should also consider your time horizon for saving for retirement. If you're younger, you may want to keep saving for a shorter period of time. But if you're older, you should probably save more.

The amount you're able to contribute to your 401(k) depends on your income, age, and other factors. For example, if you make a lot of money, you may be able to invest more in your 401(k). However, you should also consider other financial goals, such as building an emergency fund.

Work with a Financial Planner

Whether you have a Roth 401(k) or are saving for retirement on your own, now is a good time to start thinking about your financial future. Having a plan in place can help you build wealth for the long haul and ensure that your golden years aren't a total flop. And, if you're lucky enough to work for an employer who offers a matching 401(k), you'll be doing yourself a favor.

For example, if you aren't already using a target-date fund, now is the time to join the ranks. These funds will grow more conservative as they approach your chosen retirement date. And, if you're feeling particularly lucky, you may be able to take advantage of the CARES Act, which offers a number of hardship exceptions. You'll also want to be sure to set aside a few bucks for retirement taxes. This is not to mention the fact that a 401(k) will allow you to save for a house down the line, assuming you stay in your current job for long enough.

several investing charts


Investing in a 401k is one of the most effective ways to save for your retirement. It is also one of the easiest ways to start investing. However, if you are not able to invest enough in your 401k, you may end up losing your money. The good news is that you can protect your 401k from a stock market crash. Depending on your age, you can make adjustments that can help protect your 401k from a stock crash.

First, you should diversify your 401k. Diversification means that you are not micromanaging your investments. Rather, you have chosen a mix of different investments that have different risk levels and returns. This will ensure that you can withstand a downturn in any asset class. You can also get a 401k plan that will invest your money in various funds. You can research different options through online portals. You can choose to invest in bond or stock funds. You can even roll over your 401k to an IRA at an outside financial institution.

Last Updated: December 31, 2023