From Yahoo Finance: 2025-05-04 12:00:00

In a recent episode of Decoding Retirement, Chris Littlefield from Principal Financial Group advises those in their 40s and 50s to stick to their financial plan amid market volatility. He emphasizes the importance of seeking professional advice and avoiding trying to time the market.

Littlefield recommends maximizing tax-free savings opportunities and making catch-up contributions for those over 50. The standard annual contribution limit for 401(k) plans in 2025 is $23,500, with a catch-up limit of $7,500 for those 50 and older.

Individuals over 50 can contribute up to $31,000 to their 401(k) plan. Littlefield suggests having an investment policy statement and seeking professional guidance, like managed accounts or target-date funds, to assist with investment strategies.

Managed accounts and target-date funds provide professional asset allocation and rebalancing services. Littlefield advises using a target-date fund when young and transitioning to a managed account near retirement for a more personalized approach.

The average expense ratio for target-date funds is around 0.30%, with fees ranging from 0.08% to over 1%. Managed accounts have separate fees, typically ranging from 0.25% to 0.75% per year, depending on the total account balance.

Littlefield stresses the importance of balanced financial wellness, urging individuals to save in their 401(k) for tax benefits. He notes that nearly 50% of workers aren’t participating in their retirement plans, a concerning trend in financial planning.



Read more at Yahoo Finance: Smart retirement moves to make in your 40s and 50s