As a company executive, you likely enjoy a comfortable lifestyle—one that you hope to continue in your retirement years. Unfortunately, traditional retirement savings options have annual contribution limits that may not allow you to accumulate as much as you would like. If you are already contributing the maximum amount to your 401(k) or other qualified plans (and possibly a deferred compensation plan as well) and still have the means and desire to save more, there may be other options.
If you have a 401(k) plan, you are familiar with the benefits afforded by these popular retirement accounts. They are a great way to set aside pre-tax earnings and enjoy tax-deferred investments that have the potential to grow over the years, especially if your employer matches your contributions.But what will happen to that nest egg if you leave your company to take another job? Maybe little or nothing at all, if you transfer the money to another qualified plan.
Once you have established and implemented an asset allocation strategy for your 401(k) retirement account based on your savings goal, time horizon, and risk tolerance, it’s important to rebalance your account periodically. Rebalancing simply means adjusting the allocations to the funds in your account back to their original targets. The following guidelines explain why, when, and how to effectively achieve this.
