Some people have been recommended by financial expert that they do little monitoring over their 401k account. But the truth is, if you actively contribute to your 401k account, you should be monitoring it closely as there are always benefits to do so. Here is how you can monitor your 401k account.

Importantly, read your account statements. As 401k’s are company sponsored programs, your company should have their own rules and restrictions, such as how often statements are mailed out. Some statements are mailed out monthly, some bimonthly. Others though, may receive their statements only quarterly throughout the year. Whenever your statements arrive, always review them. Do not just toss them aside or throw them in the trash without looking at them at all.

Take advantage of the internet. Your company may have safe websites for their employees to login and view information on their 401k account. Some websites even allow you to make changes. You can probably designate new stock. Or you could make the switch to bonds. You may also be able to increase or decrease your employee contributions. Contact your employer and ask them how to setup an online account before using this monitoring option.

Monitor using the telephone. If there is no way to access your 401k information through your statement or the internet, use the provided telephone number. Unlike using the internet, this option is a very time consuming process, especially if you need detailed information on each stock investment. Monitoring through phone can be very useful if you want to review the total saved in your 401k account or learn about your recent profits or losses. To obtain the phone number that you need to call, you might want to ask your employer.

You now know how to monitor your 401k, but why should you?  What should you look for? And how will that benefit you?

Your total contributions. By monitoring your contributions closely, you will be able to decide if you want to increase it or trim it during financial distress. Remember that it is always good to invest. But at some point you may be in a situation where you have to trim your budget or even reducing your employee contributions temporarily.

Your employer contributions. By monitoring your 401k account closely, you will see how much your employer is contributing to your 401k plans. But you should firstly find out how much your employer is supposed to contribute. Then, review your statements to ensure it is correct.  If you monitor your 401k you will quickly spot if the amounts are different. But if you do find a difference, do not automatically think you are being scammed. It may be an honest mistake, but a mistake that you must first catch before it can be fixed.

Your stock performances. If you have made any investments, by monitoring your 401k account you will notice changes which depends on the market. In this crisis, the stock market is in bad shape, so you may be seeing a loss.  Although most financial experts predict the market will start to bounce back soon, you should research the stocks you invested in yourself and make sure that it is really just a short-term bump in the road. If you conclude that it is a long-term problem, you will be able to decide what to do with your investment. You can only spot this kind of bumps if you monitor your 401k closely.

Monitoring your 401k allows you to spot mistakes or other things that you do not like, such as losing money on stock and make a decision based on that. You may decide to talk to a financial advisor.  In the year 2008, the stock market took a deep dive.  It was near record lows and 2009 isn’t looking much better.  You may want to jump ship on an underperforming stock, but it may be best to wait it out.  Always consult with a financial advisor if you cannot make an informed decision yourself.

Make sure you do not just look at your 401k statement but read all the attached documents as well. Some companies include updates with statements.  Are you now charged maintenance fees?  Is there are free seminar coming up where you can meet with financial advisors for free?  Information like this is typically included with account statements.  Never throw anything related to your 401k away without first reading.

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