Spring Cleaning Your IRA or 401k
The springtime rhyme, ‘April showers bring May flowers,’ is a great analogy to investing. It compares a less enjoyable activity, such as saving money, with the gains enjoyed later as a result. When spring cleaning your home during the April showers (or snowstorms), don’t forget to spring clean your finances as well. Ensure you’re on track for success by checking in on all your retirement accounts at least once a year. A good time to check is after filing your taxes, since your investment paperwork will be on hand and the new tax rules or contribution limits may be top of mind.
A first step in financial spring cleaning is tracking down any 401(k) accounts you may have abandoned with a previous employer. If any accounts are discovered in your search, this is a good time to roll those assets into an IRA to ensure they are being properly managed and leveraged to the fullest potential. Go one step further and set up an automatic monthly contribution to your new IRA. Then sit back and watch the compound interest grow like weeds!
Spring is also a great time to reevaluate the asset allocation of your investments. Your tax documents outlining last year’s returns on investments should be close at hand. Study these documents or log into your online accounts to see where your assets lie. Find out what percentage of your investments should be allocated to stocks, bonds, cash and alternative assets such as precious metals, according to factors such as the economy, your expected retirement date, your risk aversion and more.
The stock market can be as turbulent as seasonal storms, so ensure your finances have steady roots by diversifying your portfolio into investments that are historically stable assets like gold or silver. A safe and easy way to diversify your portfolio with precious metals is opening a gold IRA as part of your retirement savings plan. A gold IRA backed by physical precious metals also provides a hedge against inflation, a great benefit in long-term investing. If you already invest in physical gold or silver, consider increasing your allocation percentage depending on the current geopolitical climate … which could be ‘warming up’ like the actual spring climate!
Spring cleaning your house includes letting the sunshine in, so let that golden glow remind you to protect your financial future with the security of a gold IRA. See this article in U.S. News for more tips on how to spring clean your finances.