I have been providing investment advice to individual company 401(k) retirement plan participants for over 19 years. Many of my individual company 401(k) advice clients have well over six-figure balances.
Most of these individual investors have a desired retirement plan date in mind. All of these individual investors are extremely concerned about a potential repeat of the summer 2008 to spring 2009 stock market meltdown.
One of the hardest parts about managing a company 401(k) retirement plan account a few years prior to retirement is preserving the principal. It takes an entire working career to build up a company 401(k) retirement plan account. Stock and bond market volatility can turn your 401(k) into a 201(k) in a few months.
Preserving the principal value of a company 401(k) retirement plan account is a much different investment management strategy than growing the same account value.
I tell my clients and prospects that they only need to reach a six-figure company 401(k) retirement plan account balance once. They don’t need to take the stock and bond market risks associated with doing it a second time.
The U.S. stock markets are again near all-time highs. The Federal Reserve is very confident in raising interest rates going forward. There is as much company 401(k) retirement plan account principal risk now as I can remember at any time in the last few years.
Take some time now and consider your emotional ability to take a considerable company 401(k) retirement plan account principal loss. If you’re just a handful of years away from your desired retirement date, this is an especially timely question to ask yourself now.
You can’t worry about what your friend, co-worker, or relative is doing or not doing to manage their company 401(k) retirement plan risk. I have multiple company 401(k) retirement plan investment advice client couples who are far different in their tolerance for stock and bond market losses.
You currently own stocks and bond in your company 401(k) account. Most likely, you are 100% invested now, and adding more money each month. There is a great deal of money at stake for you now.
For some individual investors, their biggest retirement planning concern is the possibility of running out of money before they die. I don’t think that is your biggest company 401(k) retirement plan account risk now.
Instead, your biggest company 401(k) retirement plan account management risk now is having no plan for the preservation of the last several years of stock and bond market gains along with your personal, and company-matching contributions.
It’s hard enough to get rich once. Don’t force yourself to have to get rich twice. You are running out of working years.
Ric Lager
Lager & Company, Inc.
