Three Non-Negotiables for Your AT&T 401(k)

As an AT&T employee, your 401(k) is one of the most powerful benefits that you have for building your retirement plan. But are you maximizing your 401(k) to its fullest potential?

Here are three things every AT&T employee should be doing with their 401(k).

Key takeaways:

1. You should contribute at least 6% to your 401(k) in order to take advantage of the full company match that is offered (80%, up to 6%).
2. Minimize your overall risk by diversifying out of AT&T stock in your 401(k) plan.
3. Ensure that your beneficiary information is up to date and checked at least on a yearly basis.

Max Out Your Company Match Potential

One of the most powerful benefits that you can receive as an AT&T employee is the company match contribution to your 401(k) account. Think of this as free, tax-deferred money, on top of your base paycheck.

The key here – that not everyone takes advantage of – is setting your contribution to at least the level that you are getting the full company match available.

AT&T matches 80% of the first 6% of your contribution. For example, if you earn $75,000 and contribute 6%, AT&T adds roughly $3,600 to your account each year — essentially a 5% raise just for saving."

So, if you are contributing any less than 6%, you are essentially turning down free money. If you can increase your contribution beyond 6%, that is even better – but at the very least you should be contributing to the 6% mark.

For more information on understanding the AT&T 401(k) match, read our blog here.

Diversify Your Portfolio

Portfolio diversification is less about leaving money on the table and more about protecting what you've already saved. Here’s why.

When AT&T contributes the company match, they are actually putting the match into the AT&T shares fund. That means that your paycheck, your benefits, and your retirement are all tied to the same company and company stock.

Having “all your eggs in one basket” can bring a lot of concentrated risk.

While it isn’t a problem when AT&T stock is doing well, it does pose a significant risk if AT&T has a period of struggle. If the company stock dips down, you will feel that downturn everywhere.

You can decrease this risk by periodically going into your 401(k) and moving your money out of the AT&T shares fund and into one of the other funds that are offered. If you would like guidance in your allocation strategy, our advisers are happy to provide a recommendation based on your goals.

By diversifying your investments, you can reduce your risk and potentially increase your opportunity for earnings in the long run.

Keep Your Beneficiary Information Up to Date

This last action is simple, yet critical: making sure your beneficiary information is up to date.

If something happens to you and your beneficiary information is outdated or missing, it can create a painful and costly situation for the people you're trying to protect. In order for funds to be allocated appropriately, it would likely be forced into probate, which can be both lengthy and expensive.

As small of a task as it may seem, it is sometimes those small administrative tasks that get forgotten about completely.

As a good rule of thumb, check your beneficiary information yearly during your open enrollment period. And if you have a life event that affects your beneficiary information (ex: marriage, divorce, death), update your information as soon as possible.

Bottom Line

No matter where you are in your career at AT&T, your 401(k) is one of the most powerful tools you have for building a strong retirement.

The action items listed here are general and can apply to most people, but there are countless other benefits that you can take advantage of that could strengthen your overall financial plan, based on your individual situation.

If you’d like a personalized strategy to help you towards your own retirement goals, get in touch with one of our advisers who specialize in AT&T retirement benefits.