Is retirement on the horizon for you? Before you plan that epic send-off party, take stock of where your 401(k) plan is right now — and boost it.The 401(k) — that employer sponsored retirement account that allows you to set aside pre-tax money from your paycheck for your golden years — has a reputation as a smart and powerful retirement savings plan. And with good reason: It's one of the best strategies for long-term saving since it allows for pre-tax savings.Of course, it takes a proactive mindset and a bit of know-how to effectively tailor your 401(k) at every stage. And, if looking to retire within the next five to 10 years, now is the right time for a check in — especially since as you age your tolerance to market volatility decreases, resulting in the need for more stable investments. So it's important to stay one step ahead of things.To help you do just that, here are five tips to consider for tuning up your 401(k) before you tap into those retirement funds.<img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/GettyImages-519998865_web.jpg" alt="woman with white hair sitting at a cafe table with red flowers" class="right_image" /><h2>3. Rebalance your assets</h2>Consider rebalancing when your retirement fund's asset allocation — how investments are split among stocks, bonds, etc. — shifts outside of a set threshold, such as a 60/40 or 70/30 stock/bond mix, advises Robert Johnson, PhD, a Nebraska-based finance professor. Remember, just because you're retiring doesn't necessarily mean your portfolio should become overly conservative or stop growing. You may not want so much market exposure that it keeps you up at night, but you may want to work toward enough of a stake to potentially secure return over the long run and stay ahead of inflation."My experience is that it's best to not stress out and try to time the market," says Karsten Jeske, PhD, CFA, who retired at 44 and blogs at Early Retirement Now. Jeske says that you can be more aggressive in your asset allocation if you're flexible about your exact retirement date. And, if you have employer stock in your 401(k), it shouldn't represent more than 5% to 10% of your overall portfolio, Jeske says.Your asset allocation can have a much greater impact on your portfolio performance than the individual investments you pick. When you're within the five-year retirement red zone, consider beginning to reduce your risk exposure. "A large downturn in the market immediately preceding retirement can have devastating effects on an individual's standard of living in retirement," says Johnson.Many investors assume you should allocate more to bonds than stocks at that point. Johnson, however, believes that is not necessarily a risk-free move either: As interest rates rise, the market value of existing bonds falls. Further, the value of long-term (long duration) bonds fall much more than short-term (short duration) bonds, so near-retirees are often better served by moving into short-term bonds as interest rates are likely to rise.Bear in mind, though, that market-driven rate fluctuations don't impact the return on a given bond that's held to its maturity. Bond mutual funds, however, are more likely to decline in actual value amid rising rates. Whippo opted to rebalance to a more conservative portfolio a year and a half ago. "We moved from individual stocks to mutual funds and <a href="https://www.lifeandmoney.citi.com/lam/articles/money/managing-money/money-market-account-or-cd-account">money market accounts</a>," she says.There are other vehicles that help save for retirement, like annuities. These products convert a lump sum from your retirement account into a steady stream of monthly payments over your lifetime, which can cover your basic living expenses. You can then be more risky with the rest of your stock portfolio because you have a pot of money to cover the essentials. However, owning annuities may come with fees, expenses and surrender charges. Consider consulting a financial professional about how annuities work, the costs and whether this type of instrument belongs in your 401(k).<img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/GettyImages-640951216_web.jpg" alt="woman turns around smiling at a man while they sit at a table" class="right_image" /><h2>5. The 4% rule is now the 3% rule</h2>When it comes to preparing for your withdrawals, the old adage said that you'd likely need to spend 4% of your retirement savings each year. "It's predicated on the fact that historically, mixed stock and bond portfolios have returned a certain amount of money," says Johnson. "But in a sustained low-interest rate environment, like we have been in for the past eight years, the bond portion of any retirement portfolio isn't earning a lot."When bond portions don't earn a lot, stocks must make up for them, and that just might not be sustainable over the long term.The 4% rule may have covered an average lifespan decades ago, but what if you outlive that? To be safe, consider aiming to spend more in the neighborhood of 3% — that means withdrawing 3% of your retirement account annually over your retirement. Check with your advisor to be sure your funds will support this or use an online retirement calculator to see how long your money might last.Don't let a "set it and forget it" approach to your 401(k) limit the horizons of your retirement savings. With a bit of forethought and attention to detail, you can harness the true power of this savings plan to help make those golden years a bit brighter.

Nearing Retirement? This Calls for a 401(k) Tune-Up

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From childhood, we're told to do what we love, and with good reason."It's important to love what you're doing at work, because if your income is the only reason you're at your job, it's unsustainable and unfulfilling in the long term," says Grace Chon, an art director turned professional pet photographer. "In an ideal world, you should feel happy, fulfilled and purposeful with your career."The demands of a busy schedule and a desire to do work that was more reflective of her values led Chon to seek a stress-relieving creative outlet. She found it in taking photos of homeless pets at her local adoption center, a hobby which eventually morphed into a successful photography business.The things we do for sheer enjoyment can offer the sense of personal meaning that may be lacking in our day jobs. As in Chon's case, financial satisfaction may follow if those hobbies eventually become careers.Finding the path that will allow us to transform a favorite pastime into a profitable side hustle, or even a booming small business, isn't always as obvious or straightforward as we may have anticipated. With the right preparation and a bit of honest introspection, it is absolutely possible to make your passion your profession.<img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/workshop_t20_4lkPJy.comp_web.jpg" alt="clay pots sit on a wooden shelf in a pottery workshop" class="right_image" /><h2>Evaluate your hobby's potential to make money</h2>Turning a hobby or passion into a career requires real work, devotion and sacrifice. You'll be investing your time (and, potentially, money) while stepping away from other avenues of professional development. Consider whether your hobby can be both profitable and sustainable. Before taking the leap, think carefully about these questions:<h3>1. Is my passion something I could monetize?</h3>Take time to brainstorm different ways you could monetize your passion. Cast the net as wide as possible when coming up with ideas. Consider which monetization options you can pursue right away and which ones you may want to try once your business is more firmly established.<h3>2. Is there a market for what I have to sell?</h3>For a side gig or business to be profitable, it needs an audience. Brandon Gaille found his audience by accident while running the marketing company he founded."One day, an employee asked for my feedback on her blog," Gaille says. He realized he could apply what he had learned over a decade in marketing to help burgeoning entrepreneurs grow their online businesses.The result was the launch of his eponymous small business and marketing advice blog, which now attracts a monthly audience of nearly 2 million visitors. He monetized his pursuit by offering a course that teaches others how to build a blogging business. The course has become so successful that he was able to close his marketing company in order to blog full-time.<img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/prepping-for-dinner-service-olympia-provisions_t20_JappYw.comp_web.jpg" alt="adult man working in kitchen at a wooden table" class="right_image" /><h3>4. Am I willing to put myself out there to promote my business?</h3>When you have a product or service, turning it into a business entails selling other people on your idea. If the thought of selling turns you off, business coach Amanda Abella recommends reframing how you think about it."Many people have a negative view of sales, but I think of it more as sharing," Abella says. "You have a product or service you want to share with people, and when you share it with them, you help them."Helping others was a huge motivator for Chon. While she didn't set out with the goal of starting a photography business, she experienced an "aha!" moment after realizing there was a need and desire for her photography skills on a wider scale. Once that clicked, "turning it into a business was a no-brainer," Chon notes.<h3>Be prepared for challenges</h3>When Mark Holtzman decided to combine his two lifelong loves — photography and flying — into an aerial photography side hustle, he was unsure whether it would be successful. But after years of working for his family's business, he was ready to branch out with an enterprise of his own.While he was able to land assignments early on, Holtzman shares, "I had no idea how to do them because there's no book on how to be an aerial photographer." He faced a steep learning curve when it came to things like pricing his services, marketing his business to potential clients and getting paid.Those were the things he had to figure out as the business grew, and they may present a similar obstacle if you've never run a business before. Enlisting help from an experienced mentor and investing in education can help you navigate the waters. And if you're daunted by all the "little" things you need to do to get your business up and running, such as administrative tasks, don't be afraid to seek out help. Abella suggests hiring a virtual assistant to handle the smaller stuff.You may even find one challenge you face is the naysayers who try to steer you off the path. When Chon decided to leave her stable job for her photography business a decade ago, "People thought I was crazy," she says. Dealing with critics wasn't easy, but believing in her business allowed her to tune them out.Holtzman's photography business was born out of a desire to have something he could call his own. While he's achieved international recognition for his work, the real value lies in being able to do something he relishes — with no eye toward the exit."If you're doing something you love to do, you don't retire," he says.

Is Your Hobby Also a Career Path?

So, you've decided to get serious about savings this year. (Bravo!)But do you know where it makes the most sense to put your money?Interest rates have been climbing lately, and money market accounts and <a href="https://www.lifeandmoney.citi.com/lam/articles/money/savings/cd-ladder-strategy-for-high-interest-saving">Certificate of Deposit (CD) accounts</a> are giving traditional savings accounts, well, a run for their money.But first, the basics: CD accounts are time deposits that have a fixed interest rate, fixed term and fixed maturity date when money can be withdrawn. A money market account is an interest-bearing account that typically earns a better rate than traditional savings accounts. Money market accounts follow Regulation D rules for monthly withdrawals (up to six per month are allowed) and may come with checks or a debit card.Understanding the ins and outs of each account type and how it relates to where you are in life — whether starting your first job or heading into retirement — will help you maximize what you sock away.<img src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/unsplash_OsC8HauR0e0_web_0.jpg" alt="Young adult man wearing glasses looks out the window at some trees" class="right_image" /><h2>4 fees to account for</h2>High-yield money market and CD accounts can dazzle savers with great rates, but it's important to check the fees. Those may include:<ul><li>Monthly maintenance fees </li><li>Minimum balance fees (for money market accounts) </li><li>CD early withdrawal penalties </li><li>Excess withdrawal fees (which can apply to money market accounts if you make more than six qualified withdrawals per month)</li></ul>The more fees a money market or CD account charges, the less of your interest earnings you get to keep. The good news, says Best, is that "in today's competitive banking environment, you can easily find CDs and money market accounts that charge no or very low fees."

Should I Use a Money Market Account or a CD?

Seasoned travelers know to pack light. And, arguably, one of the most important things you can bring weighs only about five grams: a travel rewards credit card.
Choosing one can seem confusing at first &mdash; the miles, the points, the cash back &mdash; but as cardholders know, you don't have to be a math whiz or hyper organized to make the most of travel rewards. If you can create a trip itinerary, you can successfully navigate using a travel rewards credit card.
Still, while the earned miles for airline travel, points for hotel stays and other benefits unlocked by travel credit cards can be substantial, "too many people aren't tapping into their rewards," says Andrea Woroch, a consumer and money-saving consultant in Bakersfield, CA. In fact, 23% of credit card holders didn&rsquo;t redeem their rewards in the past year, according to a survey conducted by CreditCards.com. 
That adds up to missed opportunities for saving money and taking advantage of other perks. "Some rewards cards come with great travel-specific benefits like credits on hotel travel or access to priority pass airport lounges," says Pete D'Aleo, senior vice president of fee rewards growth strategy at Citi. "So whether you like to plan a big trip once a year or you're a frequent business or leisure traveler, rewards credit cards can help you get more from your journeys."
In other words, if you're somebody who travels without one of these cards, you may be missing out on valuable benefits for your travel. To remedy that, try these tips for choosing the right card &mdash; no poring over points charts or complex algorithms required.
<img class="right_image" src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/dont-lose-rewards_body-1_953243884.jpg" alt="view of pacific ocean at sunset from bluff">
<h2 style="margin-bottom: 11px;">Explore all your options</h2>
Rewards credit cards vary in their offerings, and depending on your spending and travel habits, there may be more than just one card that's worthwhile. "I believe it's a good idea to have a couple of travel reward cards," says Woroch.
Card benefits can shift, too, so "another thing people overlook is opening a new card to get more rewards," Woroch adds. "If you've been using the same card for years, you could be missing out on a better reward program and opportunity to earn even more rewards on your everyday purchases," she says.
To narrow down the cards that are best for you, think about the way you travel and your organizational habits. For each one you research, ask yourself if you'll truly take advantage of the perks &mdash; regularly enough that they'll outweigh any of the costs. These are four common factors to consider:
1. Annual fee Many travel rewards credit cards come with an annual fee. If you're going to use the perks, their collective value may be more than that fee. If you don't travel all that often, though, you may be better off with a different credit card.
2. Foreign transaction fee While many general credit cards charge foreign transaction fees, some travel rewards credit cards don't. "That's not a commonly discussed perk but it's so valuable," D'Aleo says. "When traveling internationally, those foreign exchange fees can really rack up."
3. Welcome bonus After applying, new cardmembers typically receive a welcome bonus of some sort &mdash; say, a generous amount of bonus miles &mdash; but this also entails having to spend a certain amount of money on the card within a set time. To take advantage of this, you need to be the type of person who will keep track of what you'll need to spend to earn the bonus.
4. Rewards points or miles This is where a credit card can really help you, and because each travel rewards credit card offers something a little different, it's worth taking the time to compare them carefully, taking your personal travel and spending habits into account. Some cards focus on airline miles that can be put toward future trips, for example, and some offer additional points or cash back earn on travel purchases. Others give you points on travel-related purchases like dining, gas, flights, hotel bookings and rental cars, which you can redeem for online shopping, travel purchases, gift cards or other items. Some credit cards may even have relationships with ride share services that you frequently use. That's why it pays to strategize here.
"It's important to select a product that earns points in the categories that you spend," D'Aleo says. "Think about how and where you spend, and how you can get the most points from your annual spend."
<img class="right_image" src="https://www.lifeandmoney.citi.com/rcs/lifeandmoney/storage/public/dont-lose-rewards_body-2_627380346.jpg" alt="A couple ride bikes in Cartagena, Colombia">
<h2 style="margin-bottom: 11px;">Make the most of rewards</h2>
The key is to organize your spending so that you're using the right card at the right time. One way is to set up calendar reminders for monthly or quarterly spending with a certain rewards card, or you can keep a digital cheat sheet of cards and categories. Another idea is to mark your rewards cards with color-coded stickers to identify which one you may want to use for travel versus groceries or dining, for example.
One challenge travel-rewards cardholders commonly encounter is blackout dates, but there are strategies to help navigate these. (And of course, there are some travel rewards credit cards that have no blackout dates at all.) If you see blackout dates when researching a flight and you don't need to buy the tickets right away, it's a good idea to check back before purchasing because blackout dates can often shift. Another option is to refocus your flight search on a different airline that's a partner of your credit card company. "Being flexible is key to stretching your dollars," Woroch says. If you can take a super early flight or depart in the middle of the week instead of on a weekend, for example, you may find that you can book with points and have more left over for future trips too.
And because credit card terms aren't always top of mind, the weeks before you leave for a trip can be a good time to take stock of your travel card's perks. You're not likely to forget the exciting ones, like a big welcome bonus, Woroch notes, but it's easy to forget something like trip-cancellation insurance or complimentary baggage checking. You also wouldn't want to pay for car rental insurance at the checkout counter only to later learn that your card offers this for free.
Maximizing your points and perks is what travel rewards credit cards are all about, after all. Because it isn't enough to pack light &mdash; you also want to lighten the load on your budget.
&nbsp;
&mdash; With additional reporting from Geoff Williams and Life and Money by Citi editors.

How to Maximize Your Travel Rewards Credit Card 

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