Is Your 401(k) on Track — or Just on Autopilot?
What to Do When Your Retirement Plan Lacks Clear Guidance
Introduction: When Your Biggest Investment Doesn’t Come with Clear Instructions
For many individuals — especially those in executive, corporate, and professional roles — your workplace retirement plan might be your single largest asset, excluding your home. Yet for all its importance to your lifelong financial health, your 401(k) or similar employer-sponsored plan often comes with limited guidance.
You’re offered a menu of investment choices, sometimes with confusing names, target dates, or cryptic benchmarks. And you’re expected to self-direct your long-term financial future based on generic tools or quarterly statements that tell you little about whether you’re truly on track.
This whitepaper is designed to help you answer a simple but critical question:
“Am I okay?”
Let’s explore what it means to take your retirement plan off autopilot and bring it into alignment with your goals, risk profile, and the rest of your wealth picture.
1. Is Your Asset Allocation Actually Working for You?
Aligning Your Portfolio with Your Stage of Life and Risk Tolerance
Many workplace retirement plans offer a limited set of mutual funds or target-date funds, but few investors know whether these allocations reflect their personal goals, time horizon, or risk comfort.
A misaligned allocation can lead to either excessive risk or stagnation that quietly erodes long-term purchasing power.
Key Considerations:
- Are you using a target-date fund just because it was the default?
- Are your allocations diversified beyond U.S. large-cap stocks?
- Have you reviewed your portfolio since a major life or market event?
- Does your portfolio account for income sources you’ll have outside the 401(k)?
Hypothetical Case Study: Jonathan, Age 52, Tech Executive
Jonathan has $1.4 million in his 401(k), almost all in a 2035 target-date fund. After a conversation with his advisor, he realized the fund’s bond allocation was too conservative given his expected retirement at 62 — and his aggressive non-retirement investments were not accounted for. By restructuring his 401(k) to include more international exposure and aligning it with his taxable portfolio, he achieved better diversification and increased tax-efficiency.
Takeaways:
- Don’t assume the default option is the best fit.
- Revisit your asset mix at least annually or after major life changes.
- Integrate 401(k) planning into your full portfolio, not in isolation.
2. Are You Contributing Enough — And in the Right Way?
Maximizing Employer Plans for Tax Efficiency and Long-Term Growth
Many plans allow for contributions beyond the basic deferral, yet high earners often leave tax-advantaged space on the table.
Knowing how and how much to contribute requires a careful look at your income, future liquidity needs, and tax bracket now versus in retirement.
Key Considerations:
- Are you taking advantage of after-tax contributions and Mega Backdoor Roth strategies?
- Are you maximizing employer matching and profit-sharing contributions?
- Should you be shifting some contributions to Roth 401(k) versus pre-tax?
- Does your plan offer in-plan conversions or additional savings vehicles?
Hypothetical Case Study: Michelle, Age 47, Law Firm Partner
Michelle contributed $23,000 per year to her traditional 401(k) and received a $9,000 employer match. Her advisor helped her realize her plan allowed for $38,000 more in after-tax contributions—and she could convert that annually to a Roth. That extra move could grow tax-free for the next 20 years. Over time, the difference could amount to hundreds of thousands in after-tax value.
Takeaways:
- Explore all plan options — not just the basics.
- Tax diversification (Roth + traditional) gives flexibility in retirement.
- Small adjustments now can significantly alter long-term outcomes.
3. Are You Monitoring Performance and Costs?
Understanding Fees, Fund Selection, and Benchmarking
Even when performance looks “fine,” hidden fees or inefficient funds may be quietly eating into your returns. Most plan participants don’t know how to evaluate performance relative to an appropriate benchmark — or how to assess whether fees are justified.
Key Considerations:
- Do you know your fund expense ratios?
- Are your funds active or passive, and is that intentional?
- Are your investments keeping pace with the market or lagging over time?
- Are you holding cash or stable value funds by default without realizing it?
Hypothetical Case Study: Rafael, Age 60, Hospital Administrator
Rafael assumed his plan was low cost because it was offered by a large recordkeeper. But deeper analysis showed that two of his core funds had expense ratios over 1%, and one had significantly underperformed its benchmark for the last 5 years. By switching to lower-cost index funds, he shaved more than $6,000 a year in expenses — compounded over 7 years, that change alone made a six-figure difference in his projected retirement balance.
Takeaways:
- Fees compound.
- Always benchmark performance against appropriate indexes.
- Hidden inefficiencies can quietly drain your long-term growth.
4. Do You Know How It All Fits Together?
Integrating Your Retirement Plan into Your Full Financial Picture
Your 401(k) doesn’t exist in a vacuum. Yet many professionals never coordinate their workplace plan with outside savings, real estate, stock options, or other investments.
A plan that seems “good enough” on paper may fall short when viewed through the lens of income replacement, estate planning, or tax exposure.
Key Considerations:
- Do you have overlapping holdings in your taxable and retirement accounts?
- Are you managing withdrawals and required minimum distributions (RMDs) proactively?
- Will your 401(k) work in concert with Social Security, pensions, or deferred comp?
- Do you have a strategy for rebalancing or reallocating as retirement nears?
Hypothetical Case Study: Priya, Age 58, Medical Specialist
Priya’s 401(k) was aggressive, and her taxable accounts were too conservative. She also had a deferred comp plan that would pay out post-retirement. By looking at her full picture, her advisor repositioned assets to better match withdrawal timing, optimized tax location (putting higher-growth funds in tax-free accounts), and built a 10-year glidepath toward retirement income.
Takeaways:
- Your 401(k) is just one part of a broader strategy.
- Lack of coordination can lead to duplication or missed opportunities.
- A holistic view enables proactive, not reactive, planning.
Conclusion: Don’t Leave Your Future on Autopilot
Your workplace retirement plan might be one of the most powerful tools you have — but without professional guidance, it can also become one of the most neglected.
If you’re unsure whether your 401(k) is aligned with your goals, tax situation, or broader investment strategy, it’s time to ask more than just “how much do I have?”
Ask:
- Is my money working hard enough?
- Am I taking too much — or too little — risk?
- Am I missing opportunities that others with similar resources are using?
If you would like more information about the terms and strategies discussed in this guide, or if you’re ready to explore how they apply to your specific situation, contact Waverly Advisors. With experience working with individuals, families, and executives managing significant wealth, we specialize in creating tailored strategies with the goal to help you grow, protect, and transfer your assets effectively.
MEET THE AUTHOR
Rhonda K. Holifield, CFP®
Partner, Wealth Advisor
Rhonda Holifield joined Waverly Advisors in November of 2023 after Prosper Financial Advisers was acquired by Waverly. Rhonda serves as a Partner and Wealth Advisor at Waverly in St. Petersburg, FL. Her career started in 1999 as a senior planner and Chief Investment Adviser at a fee-only financial planning firm in Tampa. She managed client assets through bear and bull markets, gaining valuable hands-on experience in a variety of market conditions… Learn More
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