Low-Hanging Fruit - Strategies Not to Overlook

At Lighthouse Wealth Partners, we prioritize ongoing communication and take pride in delivering timely updates and meaningful insights to help guide your investment decisions. Many investors spend significant time searching for sophisticated investment strategies while overlooking simple financial moves that can help improve their long-term financial picture with minimal risk.

Some of the most impactful planning strategies include basic, but effective decisions - such as improving cash yields, maximizing employer benefits, and minimizing investment expenses. While these strategies may not be flashy, our focus this week illustrates how gathering some of the low-hanging fruit can add meaningful value over time.

Make Your Cash Work Harder

Holding cash for emergencies and short-term needs is important, but many investors unknowingly leave large balances sitting in low-yield accounts earning little to no interest.

In some cases, traditional bank sweep accounts or savings accounts may still pay only a fraction of 1%, while many money market funds, Treasury products, high-yield savings accounts, and CDs currently offer materially higher yields.

For example, a $50,000 balance earning 0.01% generates only about $5 annually in interest. That same balance earning 3.50% could generate roughly $1,750 per year without taking on additional market risk.

Reviewing cash holdings and evaluating higher-yield alternatives can be one of the simplest ways to potentially improve portfolio efficiency.

Be Mindful of Investment Costs

Investment expenses matter - especially over long periods of time.

Even small differences in expense ratios can compound into meaningful differences in long-term returns. This is particularly important when comparing index funds that track the same benchmark.

For example, let’s compare the BNY Mellon S&P 500 Index Fund PEOPX (formerly Dreyfus) to the Vanguard S&P 500 Index Fund (VOO). The former has a 0.50% annual expense ratio while the latter has a 0.03% expense ratio. Did VOO outperform PEOPX by the differential of 0.47 percentage points annually? No. The differential was even larger at 0.55 percentage points annually. For the 10 years ending in 2025, VOO returned 14.79% annually while PEOPX returned 14.24% annually. Low-cost index funds tend to attract more investments and can operate more efficiently. If the index fund is in a taxable account, gains must be considered.

Reviewing:

• Fund expense ratios
• Advisory and platform costs
• Tax efficiency
• Account structure

Monitoring the aforementioned can help ensure more of an investor’s return remains invested and working toward long-term goals.

Don't Miss an Employer 401(k) Match

An employer retirement plan match can represent one of the most valuable workplace benefits available. Yet many employees fail to contribute enough to receive the full employer match - effectively leaving additional compensation on the table.

Imagine an employer offering to give employees each a couple of thousand dollars, and they say “no, thanks"? According to some estimates, including research from the Society for Human Resource Management, estimates conclude that 25% of employees who qualify for an employer match miss out on receiving the full amount. While understanding that every financial situation is different, contributing at least enough to capture the full employer match is often an important foundational retirement planning step.

Review Old Retirement Accounts

Many investors accumulate multiple old 401(k)s or retirement accounts throughout their careers and rarely revisit them.

Reviewing older accounts may help investors:

• Consolidate accounts
• Reduce fees
• Simplify investment management
• Improve diversification
• Better align investments with current goals

Periodic reviews can help ensure retirement assets remain coordinated and appropriately invested. If you need help or have questions, please do not hesitate to contact our team.

Final Thoughts

Successful financial planning is not always about finding complex strategies or predicting short-term market movements. Often, the greatest opportunities come from consistently focusing on simple, disciplined financial decisions that investors can control.

Small improvements in cash management, debt reduction, fees, tax efficiency, and retirement savings habits can compound meaningfully over time and help strengthen long-term financial outcomes.