The Top 5 Financial Mistakes I See DTE Employees Make

The Top 5 Financial Mistakes I See DTE Employees Make

June 21, 2023

Managing finances effectively is crucial regardless of what stage of your financial journey you’re in. Throughout the years, I’ve had the opportunity to help some of the hardworking employees at DTE prepare for retirement and meet their financial goals. In working with them, I’ve noticed five common financial mistakes that are often overlooked by DTE Energy employees. I’ll show you how to identify those mistakes and the steps you can take to make better financial decisions. 

1. Forgetting to Diversify Beyond DTE

One common mistake I see among DTE employees is the tendency to overlook the importance of diversifying their investments. While being invested in your employer’s stock is beneficial, relying too heavily on a single company can expose you to unnecessary risks. If the company faces financial difficulties or experiences a decline in stock value, your investment portfolio could suffer.

To mitigate this risk, it’s essential to diversify your investments across different businesses and industries. You could even further diversify your investments by asset class such as stocks, bonds, mutual funds, and real estate. 

When you spread your investments across different companies and assets, the negative performance of any single investment is less impactful on your overall portfolio. The process of diversification can be complex, so you may want to involve a financial advisor to help you diversify your portfolio.

2. Not Taking Advantage of the HSA

A health savings account (HSA) is an underutilized way to save for qualifying medical expenses. In my experience, many DTE employees forget to maximize the benefits package by contributing to an HSA. These tax-advantaged savings accounts are available to individuals with high-deductible health insurance plans. Contributions to an HSA are tax-deductible, and withdrawals for qualified medical expenses are tax-free.

Take full advantage of your HSA by contributing the maximum allowed amount each year. Not only will this provide you with valuable tax savings, but it also serves as an effective way to save for future healthcare expenses. There’s also the potential for long-term growth when you choose to invest your HSA funds in a diversified portfolio of mutual funds. So not only is your money in a tax-advantaged account, but it’s also working hard for you. 

3. Not Maxing Out the 401(k) Match

Many DTE employees miss out on valuable employer contributions to their 401(k) retirement plans by not reaching the matching contribution limit. A 401(k) match is money that your employer contributes toward your retirement (usually within a set percentage) on top of what you contribute. That has the potential to significantly boost your retirement savings. When you don’t max out your 401(k) employer match, you’re missing out on extra money toward your retirement. 

Instead of making this mistake, make it a priority to contribute at least enough to your 401(k) to receive the full employer match. For example, if your employer matches up to 4 percent of your contributions, aim to contribute at least that percentage of your income. By not taking advantage of this benefit, you are leaving money on the table and missing out on a powerful tool for retirement savings.

4. Not Choosing the Most Tax-Efficient Tax Savings Option Within the 401(k)

Your efforts to save toward retirement in your 401(k) don’t end once you set your annual contribution amounts. Within your 401(k), there are also tax savings options from which to choose. What I typically see is that employees aren’t choosing the most tax-efficient savings option. The three main options include pre-tax contributions, Roth contributions, and after-tax contributions. Choosing the best option for you isn’t always a straightforward decision. 

Assess your current and projected tax situation to determine which option is most advantageous. Pre-tax contributions lower your taxable income now but will be subject to taxes when withdrawn during retirement. Roth contributions are made with after-tax dollars but offer tax-free withdrawals in retirement. After-tax contributions can provide additional savings opportunities, but their tax implications depend on your specific plan rules. 

The best way to determine the most tax-efficient option is to consult with a financial advisor if analyzing tax liabilities isn’t your strong suit.

5. Not Spending Enough Time Being Intentional With Money

The final mistake I observe among DTE Energy employees is not spending enough time being intentional with money. The demands of daily life and work often leave us very little time dedicated to thoughtful financial planning. However, the decisions you make with your money can affect you for years down the line. 

It can be helpful to set aside time to focus on your financial goals. Start by taking the time to educate yourself on the personal finance topics you’re not comfortable with. Create a budget, track your expenses, and set clear financial goals. 

Develop a financial plan that aligns with those goals and regularly review your progress. When you prioritize your financial standing and make intentional steps to reach those objectives, it can help you progress more quickly. 

Make Better Financial Decisions With a Financial Advisor

By recognizing and rectifying these financial mistakes, DTE employees can take control of their financial futures. At Center for Wealth Management, we work with DTE Energy employees to safeguard their wealth and develop a plan to help them pursue their goals with confidence. 

If you’re ready to start conquering these common pitfalls with a personalized financial plan, schedule your free introductory meeting by reaching out to us at (248) 220-4321 or emailing robert@cwmfinancial.net

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About Rob

Robert Moore is senior partner, financial planner, investment advisor, and co-owner of Center for Wealth Management, an independent, fee-based wealth management company based in Troy, MI. With more than 15 years of experience, Rob provides customized advice and solutions that are in the clients’ best interest. He strives to always go above and beyond his clients’ expectations, helping them retire with more security than they had before, and invest their time and energy in what’s most important to them. Rob specializes in working with DTE Energy employees, helping them maximize their benefits so they can reduce taxes, prepare for retirement, and protect their families through a comprehensive planning process. Rob graduated from Michigan State University and holds the CERTIFIED FINANCIAL PLANNER™ and Chartered Financial Consultant® (ChFC®) certifications.

Rob is known as a diehard family man who enjoys spending time with his beautiful wife, Jill, his daughter, Brookelyn, and his son, Brayden. When he’s not working, you can find him playing basketball once a week, squeezing in a round of golf, and watching college football and basketball with friends and family. He is passionate about enriching the lives of others through his church involvement and service at a community addiction program. Learn more about Rob by connecting with him on LinkedIn.