Set It & Forget It with Your Retirement?

In order to produce the podcast and keep content up free for you, I work with partners so this post may contain affiliate links. Please read my full disclosure for more info.

One tip that I often give to readers here is automating your finances when possible.

I've seen how we can sometimes be our own worst enemies, especially when stressed out by all the noise out there about the market.

Automation has been wonderful for us. It's how we pay our bills, saved for a house, and paid off our car loan faster.

You've probably heard of paying yourself first. But let's be honest – it can be easier said than done.

However if you want to reach your goals and invest for your future, you have to follow through.

When you automate those contributions you're making sure that it gets done.

No waiting until after all the bills are paid (and there is little, if any, money leftover).

Don't Completely Set It and Forget It

While I believe that automating your finances can be a big advantage, it isn't the end-all solution.

Even when you automate your contributions, you still need to be aware of what's going on with your money.

Let me explain why with my husband's 401(k).

Pros and Cons of Automating Retirement Contributions

My husband’s job offers a 401(k) with a match so he contributes enough to get 100% of that match.

That extra money from his company grows in his 401(k), building the balance faster than if it only had his contributions.

It's automatically deducted from his paycheck so we're never tempted to spend that money on something else.

That helps us to take advantage of the power of compound interest. He signed up as soon as he qualified, giving his money more time to grow.

He's been there for years and we've seen the balance grow in that time. He doesn't have to worry about missing a contribution, it's automatically sent in every pay period.

Reviewing Asset Allocation

On the other side of automation is when he gets too busy and forgets to check his portfolio for performance.

Every quarter or so check one's asset allocation can make sure that the retirement fund is on target. It may be that it's time to re-balance the assets so it's back on target.

With our recent net worth review, we did discover that it was time for him to re-balance.

By the way if you have an IRA, you also need to check to make sure everything is balanced.

For most people it's simply redirecting future contributions to make your portfolio match the target allocation you created. Others may sell and buy their current assets to get what they want.

If you find that you'd prefer automating re-balancing then having an account with a company like Betterment can be useful option. They can handle that task for you and it's free. You can check them out here!

Of course they are not the only option for keeping your IRA. I also loveand use  Vanguard  for my IRA.

Charles Schwab and Fidelity are other companies your can use.

Thoughts on Automating Retirement Contributions

How about you? How do you feel about automating your retirement? Do have automatic contributions set up for your 401(k) and/or IRA?

What percentage of your pay do you put in? What are some of the pluses for you on automating your money? What are the negatives?

Disclosure: I've included affiliate links in my post.