Retirement Plans: 401k, 403b and IRA's

Fewer employers are offering 401K plans for their employees for numerous reasons (cost, fiduciary liability, etc). If you are fortunate to have an employer sponsored 401K or the non-profit counter part 403B, who is going to help you navigate the myriad of investment options? It is enough to just pick a Target Date Fund and be done with it.

And what happens to your 401K when you retire? Who will help you navigate the seemingly unlimited rollover options?

The solutions for both of these situations is to work with an Advisor who will take the time to know you and your goals, and implement a strategy to fit your needs. This is the way to take control of your retirement!

It has long been known that individual investors do not typically fare well in their efforts at do-it-yourself investing. This notion has been validated by numerous studies which reveal the staggering margin by which the average individual investor trails the returns of the broader market.

Why is the individual investor so inept at capturing the returns of the market? In a word: emotions.

Emotion drives investors to buy the latest hot investment (gold? silver?) near its peak and sell the investment after riding it to the bottom on the inevitable slide downward. The "buy high, sell low" scenario is unfortunately not just an anecdote, but is very real for many individual investors.

The end result is simple, buying on greed and selling on fear might satisfy short term emotional need, but this lack of discipline may compromise long-term objectives.

The Plan Sponsor's solution is to invest in Target Date Funds (TDFs), which shift your assets from stocks to bonds over time to become more conservative as retirement approaches. It sounds reasonable, but TDFs cannot incorporate all the relevant personal facts that determine the ideal allocation for one's retirement investments, and participants can find themselves either forefeiting needed growth or accepting unnecessary exposure to an increasingly volatile market (like 2008).

Here is some good information:

"Get Your Retirement Back On Course"

Don't settle for a generic TDF that was designed for millions of participants when you can take control of your retirement plan and create your personal retirement date portfolio. With the advice from an Advisor you trust, you can have comprehensive investment management and cohesive financial planning in your company's retirement plan. Studies have shown that 401K investors do better when they work with an advisor.

Please contact our office for a copy of this study and to set up a 401K or 403b review.