I was looking over a recent article in FORTUNE about what Congress could do to make your 401k better. Of course, waiting around for Congress to do something that would actually improve 401k plans is often a practice in futility. The last time 401k plans were upgraded was 10 years ago!
What the article did point out were some of the problems with 401k plans. In the end, it all comes down to choice. As in you don’t have any! You get what you get. In some cases, this situation can be detrimental to your overall retirement.
There is hope, however. At the very least, you need to be enrolled and at least contributing the maximum amount that is matched by your employer. Don’t have a 401k? Then make sure you are contributing to either an IRA or ROTH IRA every year. No matter how good or bad your plan is, the number one factor of winning the game, is playing the game!
Then, you need to make sure you are, and stay informed about your investment choices in the plan. What asset classes do you have available? What are the fees inside the funds?
Finally, make sure you balance your portfolio and keep it diversified. Once you have a plan in place, stick with it. Don’t let your emotions of the moment get you in the wrong place. The second biggest mistake investors can make is letting emotions run their 401k plan. The stories I could tell… I think I will save those for my next blog!
Until then, here’s to your 401k success!
Fred Cook, MBA - CAVU Financial, LLC
And Now A Word From Our Attorneys:
The article referenced was prepared by a third party and is provided for informational purposes only. It contains references to individuals or entities that are not affiliated with LPL Financial, CAVU Financial, or Stratos Wealth Partners.
The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Investing in mutual funds involves risk, including possible loss of principal.