There is a good chance that your company 401(k) retirement plan investment strategy is a myth. It began when you signed up for your first company 401(k) retirement plan account.
First, you figured out how much you could afford to contribute every month to your company 401(k) retirement plan account. Next, you answered a few questions about your investment objectives and risk tolerance.
Last, your company provided you a menu of mutual fund options. There is a brief descriptions or each mutual fund. But the language might as well be in Latin. You struggle to make intelligent investment management decisions based on a single paragraph description.
The message is clear. Save as much money as you can every month. Remain fully invested at all times. And hope for the best by the time you have to retire.
This sequence of decisions describes the company 401(k) plan investment management process for the majority of Minnesota company 401(k) retirement plan participants.
The problem is that the investment management experience does not change very much over their working career. Something is very wrong with this picture.
Company 401(k) retirement plan participants are only given a partial picture of what they really need to know about their retirement plan options. These same employees are completely on their own to figure out their best path to preserving and building their retirement plan savings.
There are options. But you have to make a firm decision to take the time to go out and look for them.
If you currently work with an investment advisor, ask him or her for direction on your company 401(k) retirement plan account menu.
If you don’t have an investment advisor to talk to, ask around. More and more investment advisors are beginning to provide investment advice to individual company 401(k) retirement plan participants.
Ric Lager
Lager & Company, Inc.
