I open myself up to age-bias claims with this post. The name and contact information of my Employment & Labor attorney can be made available by request.
WARNING: He is a long-time company 401(k) advice client of mine. So is his wife.
If you are an over 50-year-old company 401(k) retirement plan investor the odds of you successfully navigating the next great stock market crash are not very good. The same goes for navigating a rising interest rate environment.
I hate to be the one to break this reality to you. U.S. stock and bond market history will back me up.
Only 13% of employees are covered by a pension today. That leaves the rest of individual investors scrambling to find an investment management strategy that insures the principal value of their company 401(k) retirement plan account.
Saving money in your company 401(k) retirement plan is the easy part. Company-matching contributions also help. Developing and managing an investment management game plan that covers a falling stock market and rising interest rates is the hard part.
In the old days, subtracting your age from 100 would tell how what percentage of your company 401(k) retirement plan account to keep invested in the stock market. That calculation is no longer relevant. So is the old investment truth that you can easily live in retirement spending only 4% of your retirement savings every year.
If you are over 50-years-old, you don’t have the time to make up losses that come from great stock market declines. Only a handful of individual investors have ever had to deal with rising interest rates on their effect on bond prices.
The only common sense investment management solution for company 401(k) retirement plan assets to today’s volatile stock and bond markets is to limit losses.
Historic stock market highs and all-time interest rate lows are the worst possible combination for individual company 401(k) retirement plan participant nearing retirement. The margin of error is close to zero. The last several years of stock and bond market gains and personal/company-matching contributions are currently at risk.
Independent, third-party investment advisors offer a fiduciary level of investment advice. At the current historic stock and bond market levels, the most important offering is an unbiased assessment of your current stock and bond market risk.
Ric Lager
Lager & Company, Inc.
