There are three separate parts of every company 401(k) retirement plan account. The sponsor (the company you work for), the provider (the company who has custody of your company 401(k) money…Fidelity, Schwab, Vanguard, etc.), and you, the company 401(k) retirement plan participant.
You are the only person in this group that is 100% responsible for the protection of your company 401(k) retirement plan principal.
Our automobiles we have airbags, seat belts, back up cameras, automatic brakes, and lane change sensors. I surely have missed other safety features that I just can’t remember.
Our homes and apartments have security systems, motion detectors, smoke detectors and radon detectors. There is even a doorbell now that allows you to view the front door of your home from your cell phone.
Don’t forget your cell phone protection plan. Most individuals pay a premium every month in case the drop, flush, or run over their cell phone.
I think I read somewhere that the most expensive cell phone now is a little over $1,000. I am sure that you have much more money than that at risk in your company 401(k) now.
The point is that we pay, every month and every year, to protect the most important people, places and things in our lives. Why on earth don’t you do the same thing with your company 401(k)?
We are at a very serious inflection point in the current U.S. stock and bond market cycle. It is time for you to think about your answer to this very serious question.
Have you taken the time to install a security system for your company 401(k) retirement plan account?
Twice in the last 15 years individual company 401(k) retirement plan participants have lost very close to 50% of their account value. A repeat of even close to the decline of these two events would be a catastrophe for individuals within a few years of retirement.
The last great U.S. stock market decline began in October 2007. It took until May 2013 to “get back to even” for company 401(k) retirement plan investors.
“This time is different,” is not an investment management strategy for your retirement money. The same goes for, “buy-and-hope.”
I am not talking about selling everything in anticipation of more historic stock market volatility. Instead, assess how much risk you are taking now based on the stock and bond market mutual funds you currently own.
The current political, economic, stock and bond market environments require a game plan to protect the last several years of your company 401(k) retirement plan account stock market gains, company-matching and personal contributions.
No one has to suffer through historic stock market declines. Preserve your hard-warned stock market gains and company 401(k) contributions now.
Ric Lager
Lager & Company, Inc.
