Don’t ignore your 401(k) (

“Set it and forget it” works for some things — like stew in a slow cooker — but that philosophy that can really mess up a 401(k) retirement plan.

That doesn’t stop a lot of people from adopting that approach and sticking to it, sometimes for their whole employment tenure. According to a recent study by human resources consultancy Aon Hewitt, in 2014, only 19 percent of employees with a 401(k) — who aren’t invested in pre-mixed or target-date funds — bothered to rebalance their portfolios.


“We don’t advocate fretting about it weekly, but you ought to pay attention at least a couple of times a year,” says Winfield Evens, director of investment strategy and retirement research.

  • Check out your options. If your retirement fund is in a pre-mixed or target-date fund, Evens suggests that you look at how your money is invested and the returns it is getting compared to similar funds. If your company offers more than one target-date or pre-mixed option, consider those outcomes as well. If your money is invested in more than one target-date fund within your 401(k), you might consider combining in one or the other. All things being equal, the one with lower expenses is probably a better choice.
  • Get help. If you are invested in other kinds of funds or individual stocks and bonds, you may want to get some advice about rebalancing, especially if you are protecting and growing a sizable nest egg. Rebalancing generally means selling some of the investments that have done well and reinvesting the money in things that have underperformed and are poised to do better. It can help to get a second opinion before you begin to make moves.
  • Increase your savings rate. When you get a raise or annual bonus, that’s the time to raise the percentage you are putting aside. “People look for a magic pill. The magic pill here is to save more,” Evens says.
  • Ask questions. Keeping a close eye on your 401(k) also will make you aware of the options offered by your plan sponsor. Are you paying fees at institutional rates rather than retail rates? (The latter are generally higher rates that individual investors pay.) If so, are there lower-cost options available? If you would like to see changes — different investment options, funds with lower costs — start by talking to someone in human resources. Evens says more people ought to speak up when they have questions and concerns. “Don’t launch a battle,” he advises. “Just ask your questions.”

Phipps, Jennie. “Don’t Ignore Your 401(k).” Web log post. CNBC. N.p., n.d. Web. 8 June 2015.

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For more information, contact our Recruiting Manager Allie Vossoughi at & 602-314-7580, or Thomas Shultz, Managing Director  at & 602-314-7580, or Scottsdale Associate Managing Director Nancy Monaco at & 602-314-7580, or Scottsdale Associate Managing Investment Director Tom Bugbee at & 602-314-7580.

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Thomas Bugbee

Futurity First Insurance Group

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