Should I Pay Someone To Manage My 401K?

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.