401(k) Day: Make the Most of Your Employer Retirement Account

Whether you’re just starting out or well into your career, your 401(k) is one of the most powerful tools for building long-term financial security. Yet many people overlook it, setting it and forgetting it, without realizing how much opportunity they may be leaving on the table.

National 401(k) Day is about more than just awareness; it’s about action. According to the Plan Sponsor Council of America, 401(k) Day is observed on the Friday following Labor Day, symbolizing the transition from labor to retirement. Market volatility, changing tax laws, evolving contribution limits, and shifting financial goals all impact your retirement strategy. That’s why using 401(k) Day as an annual review checklist—and seeking professional guidance when needed—can make a meaningful difference in your future.

What Is 401(k) Day?

401(k) Day is an annual reminder to review your workplace retirement account, understand your plan benefits, and take action to improve your retirement readiness. It’s a good time to confirm whether you’re contributing enough, taking advantage of employer matching contributions, and investing in a way that still fits your timeline and risk tolerance.

401(k) Day Action Checklist

Strategic tax planning

By helping clients manage held-away assets, advisors can provide guidance around advanced wealth management strategies. Regardless of the size of your portfolio or what’s happening in the markets, strategic tax planning can help make a definitive difference in your retirement. An advisor can help design your portfolio with tax diversification in mind.

Maximize your employer match

One of the most practical 401(k) Day actions is checking whether you’re contributing enough to receive the full employer match. If your employer matches a portion of your contributions, failing to contribute enough could mean leaving part of your workplace benefit unused. Review your plan’s match formula, payroll deferral rate, and annual contribution pace to see whether an adjustment makes sense.

Logical decision-making

As we all know, fear and anxiety can cloud our judgment and hinder our decision-making abilities. Studies have shown that the fear of losing provokes a stronger emotional response than the thrill of winning (1). This is called loss aversion, and it can cause people to take irrational actions like pulling out of the stock market when there’s turbulence. This is where a financial advisor can add value. Your advisor can help you maintain a disciplined, long-term approach instead of making knee-jerk reactions during moments of volatility. While no advisor can guarantee better returns, professional guidance can help bring structure, accountability, and perspective to decisions that may otherwise be driven by short-term emotion.

A sense of perspective

Volatility is uncomfortable, but it’s important to keep in mind that it’s a normal—and temporary— part of the market cycle. No one knows the best times to jump in and out of the market. Time and again, we’ve seen that the markets go up in the long term. People who try to time the market have a significantly reduced rate of return when compared to investors who stay in for the long haul. It’s hard to predict when the markets will rebound, and it often happens quickly after a downturn.

According to research from Franklin Templeton, investors who missed out on the top 10 trading days from 2005-2024 would see their returns reduced by 63%3. And from 1937 to 2024, average returns for the S&P 500 were positive 76% of the time (3). A financial advisor can help to remind you of why you’re invested the way you are – with a long-term mindset, a disciplined approach, and regular contributions that optimize available employer matching.

Holistic planning

Each part of a financial plan has a ripple effect that causes wide-ranging impacts now and far into the future. It can be impactful to work with someone who understands this complexity and can create a plan that takes a comprehensive, strategic approach. Retirement savings are a key part of many investors’ overall wealth. According to the Investment Company Institute, U.S. retirement assets totaled $47.6 trillion as of March 31, 2026, and accounted for 34% of all household financial assets.] Retirement savings are too important to leave up to chance.

Here are some key benefits of working with a professional financial advisor to manage your 401k:

Asset allocation: It’s always a good idea to maintain a diversified portfolio that’s balanced based on your investment goals, and a professional financial advisor can help. They can review your investment options and asset allocations and make changes on your behalf.

Holistic wealth management: An advisor can also provide holistic wealth management across your various financial accounts, helping to ensure everything is working together in service of your personalized financial plan while constantly monitoring for tax efficiency and opportunities to improve.

Greater clarity: A financial professional can help you understand exactly what you’re invested in, providing clarity around your current and future asset allocation decisions. A clearer understanding of your investment framework can help you feel more confident about your portfolio during periods of market volatility.

To learn more about integrating your workplace plan into your larger financial picture, read Wealth Enhancement’s article on adding your workplace retirement account to your comprehensive financial plan or explore whether you’re getting the most from your 401(k) or 403(b).

Frequently Asked Questions About 401(k) Day and 401(k) Reviews

1. What should I do on 401(k) Day?

On 401(k) Day, review your contribution rate, employer match, vesting schedule, investment allocation, fees, beneficiaries, and old workplace retirement accounts. It’s also a good time to check whether your 401(k) still aligns with your broader retirement plan.

2. How much should I contribute to my 401(k)?

A common starting point is contributing enough to receive your full employer match if one is available. From there, consider increasing your contribution rate over time based on your income, goals, retirement timeline, cash flow, and the IRS annual limits.

3. What is the 2026 401(k) contribution limit?

For 2026, the IRS employee elective deferral limit for most 401(k) plans is $24,500. Participants age 50 and older may be eligible for an $8,000 catch-up contribution, and eligible participants ages 60–63 may have a higher catch-up limit of $11,250 if their plan allows.

4. Should I choose a Roth or traditional 401(k)?

A traditional 401(k) may help reduce taxable income today, while a Roth 401(k) uses after-tax contributions and may provide tax-free qualified withdrawals later. The right choice depends on your tax situation now, expected tax situation in retirement, and need for tax diversification.

5. How do I know if I’m getting the full employer match?

Review your plan’s match formula and compare it with your current contribution rate. For example, if your employer matches contributions up to a certain percentage of pay, you may need to contribute at least that percentage to receive the full match.

6. What does vesting mean in a 401(k)?

Vesting determines how much of your employer contributions you own if you leave your job. Your own employee contributions are generally yours, but employer matching or profit-sharing contributions may vest over time depending on your plan’s schedule.

7. What should I do with an old 401(k)?

You may be able to leave it in the former employer’s plan, roll it into a new employer’s plan, roll it into an IRA, or withdraw the balance. Each option has potential tax, investment, fee, and planning implications, so review the details before deciding.

8. Can a financial advisor help manage my 401(k)? 

Yes. A financial advisor may be able to review your investment options, asset allocation, contribution strategy, tax diversification, and how your 401(k) fits with your broader retirement plan. Wealth Enhancement’s Employee Retirement Account Management services are designed to help with workplace retirement account guidance.

Sources:

1 https://www.psychologytoday.com/us/blog/psychology-money-and-happiness/202403/how-emotions-impact-your-financial-decisions?msockid=359523748ee2651132bc36d28ff4645b   

2 https://www.dalbar.com/Portals/dalbar/Cache/News/PressReleases/QAIB23PR.pdf   

3 https://www.franklintempleton.com/forms-literature/download/COSTM-B   

4 https://www.ici.org/statistical-report/ret_24_q4   

Diversification and asset allocation do not ensure a profit or guarantee against loss. Investing involves risk, including possible loss of principal. Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes, and potential illiquidity.  

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