You ensure that most important things in your life. The reason is because there are important things in your life that would cost a lot of money to replace. There is no reason to suffer a huge financial loss when something bad happens.
You insure your home and your car. You buy life insurance for your family. Even if you are single, you probably have life insurance. You want your financial assets to be passed on to someone that you care about.
After your home and your car, what is the largest investment asset that you own? Most individual investors would answer, “My company 401(k) retirement plan account.”
Let’s face it. The sum total of all your old and current company 401(k) retirement plan accounts is a sizable amount.
You can insure your company 401(k) retirement plan account. You just have to be creative. And you need to be made aware of the investment advice tools and resources available to you.
You can’t actually send a check to an insurance company every year like you do with your home, car, and life insurance. There is no company on the other end of an insurance policy legally obligated to write you a check in the event of a company 401(k) retirement plan loss.
But you can limit how much the U.S. economic or stock markets cycles take from your company 401(k) retirement plan savings every few years. There is great piece of mind in that fact.
The default menu of mutual funds on your company 401(k) retirement plan menu can be ranked by several performance metrics. Those rankings can be tallied and fed back to you in a logical and organized format.
You can limit the dollar amount of investment losses that you are willing to take. Placing a percentage of your company 401(k) retirement plan account in the money market is best suited for individual investors who don’t understand economic and stock market risk.
The U.S. economy and stock markets are fading. Now is a good time to sell your worst-performing mutual funds. Limit the risk on a significant part of your company 401(k) retirement plan account.
The timing to reinvest does not have to be perfect. Stock market timing is not consistently possible. For now, just limit your losses.
Company 401(k) retirement plan insurance is possible. The only roadblock is taking the time to do it. Or find an independent investment advisor who will provide the independent analysis of your current company 401(k) retirement plan mutual funds.
Ric Lager
Lager & Company, Inc.
