JL Collins Retirement Contribution Audit

Audit annual retirement contributions using the JL Collins retirement audit methodology to maximize index fund savings.

4 time blocks, 40 minutes in total.

Time blocks

Tax-Advantaged Account Limit Check: 10 min
Confirm maximum annual limits for 401k, IRA, and HSA accounts
Savings Rate Calculation: 10 min
Divide total planned investments by gross income to find your rate
Automated Direct Investment Setup: 10 min
Schedule recurring transfers into broad low cost total index funds
Portfolio Simplicity Verification: 10 min
Check that investments remain in simple ultra low fee index holdings

About this routine

JL Collins, author of The Simple Path to Wealth, popularized a straightforward approach to personal finance centered on high savings rates and broad market index funds. Following a JL Collins retirement audit means stepping back once a year to review how much money flows into tax-advantaged accounts before funding taxable accounts.

The core strategy relies on filling tax sheltered buckets first, such as employer sponsored 401k plans, traditional or Roth IRAs, and health savings accounts. Once account contribution caps are identified, investments are scheduled automatically. This keeps personal emotion out of investment decisions and prevents attempting to time market fluctuations.

Running through this review takes 40 minutes. It ensures your portfolio stays concentrated in low-cost total stock market funds without introducing unnecessary complexity or active trading.

Why this routine works

Maximizes tax sheltered contributions in IRAs, 401k plans, and HSA accounts
Eliminates market timing decisions through automatic monthly contributions
Keeps investment management simple with minimal fee drag

FAQ

What is the JL Collins retirement audit?

It is an annual review of your savings rate and retirement account contributions, focused on maxing out tax-advantaged accounts like 401k plans and IRAs with low-cost index funds.

How long does a JL Collins retirement contribution review take?

The review takes 40 minutes to audit account limits, calculate your savings rate, and automate investment transfers.

Which accounts are prioritized in this audit?

Tax-advantaged accounts are filled first, including 401k or 403b plans, Roth or traditional IRAs, and HSAs, before placing surplus cash into taxable brokerage index funds.

Sources

The Simple Path to Wealth by JL Collins

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