How do I know how my 401k is performing?

A 401k is a retirement savings plan sponsored by an employer. It’s named after the section of the Internal Revenue Code that governs it. 401k plans are designed to help employees save and invest for retirement.

Generally, 401k plans offer a selection of investment options, including stocks, bonds, and mutual funds. Employees can choose how to allocate their 401k contributions among the available investment options.

Employees who participate in a 401k plan typically have the option to make pre-tax contributions and/or after-tax contributions. Pre-tax contributions are deducted from an employee’s paycheck before taxes are withheld. After-tax contributions are deducted from an employee’s paycheck after taxes are withheld.

Many 401k plans also offer a employer match. The employer match is a contribution that an employer makes to an employee’s 401k account. The employer match is typically a percentage of the employee’s contribution, up to a certain amount. For example, an employer might match 50% of an employee’s contribution, up to 6% of the employee’s salary.

Employees can typically start withdrawing funds from their 401k plan at age 59½. However, if an employee withdraws funds before age 59½, they may be subject to a 10% early withdrawal penalty.

Employees are also required to start taking minimum distributions from their 401k plan at age 70½. The minimum distribution is the minimum amount that an employee must withdraw from their 401k account each year.

To find out how your 401k is performing, you can request a statement from your plan administrator. The statement will show your account balance and the investment performance of your account.

You can also log into your 401k account online to check your balance and investment performance. Many 401k plans offer online tools and resources to help employees monitor their account.

If you have questions about your 401k account, you should contact your plan administrator or the company that manages your 401k plan.