How well do you really know your 401K?
For many people, a 401K is the easiest and most convenient way to save for retirement. Unfortunately, many people don’t know as much about their 401K as they should. As a result, they aren’t getting as much out of it as they could.
To help, we prepared a special infographic that lists five questions you should ask yourself about your 401K. If you already know the answers, great! But if you don’t, it may be time for a review. If so, please don’t hesitate to contact us. We would be happy to offer a second opinion on how to get more out of your 401K. Our hope is that you find this infographic thought-provoking.
As always, please feel free to contact us if there is anything we can do for you.
If you feel that you are not receiving adequate investment advice from your employer’s retirement plan provider, we can manage your 401K, TSA, TSP, Simple Plan or Pension Plan. If your portfolio lost more than 10% in the last recession, you need to take another look at how you are managing risk. Research Financial Strategies can help. We will provide an unbiased review of your 401K and offer advice based on the best potential investment choices available in your plan.
- Jack Reutemann CEO & Founder
Employer Retirement Plan 2nd Opinion
With the uncertainty of stock market fluctuations and the lingering question of when the next bear (down) market may occur, you probably are wondering what to do with your retirement 401K plan investments. Add more to your winners? Take your profits and run? Or do nothing at all? The gravity of making a potentially bad choice can be daunting to most investors. Some weary investors make the mistake of “setting it and forgetting it”. But that level of fiscal avoidance almost always has a negative impact on your portfolio returns. That is why many confused investors are turning to managed accounts in their 401K plans in which they pay a fee to have independent professional investment advisors help make these decisions. This is becoming an ever increasingly popular choice.
Managed retirement accounts have been proven to offer more value to 401K investors
A recent study by MarketWatch shows that those who used managed accounts earned 3.32 percentage points more on average than do-it-yourselfers NET of fees. That’s probably because of the tendency of investors to chase performance. They become aggressive when the stock market is doing well, and more conservative when the market is down. This ultimately leads investors to buying high and selling low.
Many investors also leave their money in cash, either because it was the default option when they opened their employer 401K and they never changed it or because their unfamiliarity with investing makes them too afraid to do anything else. In fact, the Target Date Retirement mutual funds which have become a staple on most employer sponsored 401K plans were inspired as a default placement for new enrollees. Target Date Funds not only give investors an easy, no research choice but also help reduce the liability claims towards the plan sponsors when they used to use cash as the default choice. But Target Date retirement funds aren’t usually your best choice for maximizing your retirement investment account returns.
Need A Consultant?
We can manage your 401K, TSA, TSP, Simple Plan or Pension Plan. If your portfolio lost more than 10% in the last recession, you need to take another look at how you are managing risk.
Retirement Plan Confusion?
Are Target Date Retirement Funds a good choice?
“Target-date funds don’t necessarily mirror the performance of the larger stock and bond markets. Instead, their returns depend on the mix of their individual portfolios, and in some years, their returns may be very disappointing.” NewYorkTimes.com
Your investment choices most likely will be very limited within a typical employer sponsored 401K plan. You most likely will have access to target-date mutual funds from only a single provider which are the default investment if you choose not to make fund choices. Read More >>
Have you ever thought you’d be happier if you could just pay someone else to do watch your company 401K retirement plan account? Like most other things in life, there is a study that will help you answer that question.
If the majority of fund management won’t even invest in their own target-date retirement funds….why should you? “More than half of the industry’s target-date series are run by managers who have made no investments in the target-date funds they oversee”.
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