What is a 401(k) Statement?
A 401(k) statement is a periodic report sent to employees who participate in a 401(k) retirement plan. This statement provides a detailed overview of the account's performance and health, typically issued quarterly or annually.
Key Components of a 401(k) Statement
- Account Balance: Displays the current total value of your 401(k), including both contributions and investment growth.
- Contributions: Details the amount you and your employer have contributed over the reporting period.
- Investment Performance: Shows how each of your investments has performed, including gains or losses.
- Fees and Expenses: Outlines any fees deducted, which can affect overall returns.
Importance of 401(k) Statements
These statements are vital for retirement planning. They help participants understand their investment performance, ensure accurate record-keeping, and can aid in making informed decisions about future contributions or adjustments to investment allocations.
Regularly reviewing 401(k) statements empowers individuals to take control of their retirement savings, ultimately leading to better financial outcomes in their retirement years.