In many cases, a person’s 401(k) is by far their largest retirement asset – and it can go for years with little attention being paid to it.
I am part of a team at Hefren-Tillotson that includes my daughter, Erin, along with Rick Scotti. We work together to help people with all aspects of their retirement planning. Erin and I help employees with the investment choices in their 401(k) plans, and Rick helps employers with the actual setup of the plans.
Back in the day, you showed up for work, put in your eight hours a day for forty-plus years, and were promised a pension would be waiting for you when you retired. That all sounded great. Unfortunately, those agreements – called Defined Benefits Plans – have gone the way of the Dodo bird.
The defined benefit simply meant that you were promised – not guaranteed – a certain amount of income in retirement by the company you worked for. Because of the potential liabilities associated with Defined Benefit Plans, many companies in the 1970s migrated to Defined Contribution Plans, known today as 401(k) plans.
How They Work
Typically, both you and your employer contribute to the 401(k) plan. Your employer usually matches a percentage of what YOU put in. YOU make all the investment decisions in the plan. Basically, the decision making process for your investments went from the company in Defined Benefit Plans to you in Defined Contribution Plans.
If it appears like there is mounting pressure on YOU to make good investment choices, there is. And like many people, unless you do it for a living or a hobby, you are not equipped to make those really important decisions. The big problem associated with the dramatic change in retirement accounts is that most individuals have a very difficult time making basic money decisions. Now, they are being asked to make crucial decisions that affect them, their families, their retirement plans and their future retirement income. This is where professional help can be a tremendous benefit.
The way you get assistance with your 401(k) investment choices is by taking advantage of what we have to offer. Rest assured, no matter who has your 401(k), we can offer you active, ongoing help. Contact our team at www.WeberGroup@hefren.com. We will respond to you within one business day of receiving the inquiry.