Almost every business day, I jump out of the virtual bushes. And surprise an individual 401(k) investor with my phone call or e-mail. My contact always comes as a surprise.
Because I always ask a detailed question about their 401(k) account. One they were not expecting. One that makes them think hard about their response.
The automatic reaction is, “My 401(k) is fine. I am not interested.”
I know that response is not the truth. In most cases, I have reviewed a copy of their default 401(k) mutual fund menu. Filled with expensive mutual funds. The majority of them not keeping up with the popular stock market averages.
The reason for reaching out to participants in this company 401(k) retirement plan in the first place. I offer a simple strategy to improve their 401(k) mutual fund decisions.
Most individual investors don’t want to talk about their retirement plans. Because they are too busy. And their 401(k) account is “doing fine” without them having to pay any attention the last few months.
Their 401(k) account always goes up. Because the stock market always has, and always will, go up. And interest rates will never rise again.
Hundreds of thousands of dollars. All with no responsibility. Only in America.
I will bring the problem to your attention. For the simple fact that no one else involved in the offering and your participation in a 401(k) plan will bring it up.
Yor are not a 401(k) retirement plan expert. You don’t know if your 401(k) is O.K. You don’t have the sophistication and level of experience analyzing mutual funds.
Your 401(k) sponsor (your company) is not going to tell you about a bad 401(k). They have enough lawsuits to deal with now. They don’t want to invite any more.
Your 401(k) provider (Schwab, Fidelity, Empower, etc.) is not going to sound a warning alarm on your 401(k) mutual fund menu. See the same lawsuit reason listed before.
Everyone involved with your 401(k) account will always tell you it is “doing great.” Even when you never ask the question.
Don’t be one of those individual 401(k) participants. That provides the same quick answer. To a question you have never taken the time to research.
Individual 401(k) investors can’t afford to take someone’s word. That no changes are necessary in their 401(k). They need an actual analysis and facts. Presented in a way they can understand.
I am not talking about changing your 401(k) provider. That decision is for your company to make.
I am talking about the individual 401(k) mutual funds you own now. There is only one way to know if your 401(k) is doing O.K. now.
Ask an independent third-party, fiduciary level investment advisor. One not affiliated with your company. Or your 401(k) provider.
I have spent the last several years trying to figure out the best way to share my 401(k) advice content. I have tried Twitter, Facebook, company web site, and LinkedIn Groups. I now realize nothing beats a well-crafted newsletter delivered to your inbox once a week.
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