DOLLARS AND SEN$E: Is your 401(k) failing you?

Christopher-Hanly-pic-213x300BY CHRIS HANLY

Investment Consultant, Gary Goldberg Financial Services

A recent investor survey by Charles Schwab caught my eye. In essence, it detailed that over 90 percent of those surveyed were either somewhat or very frustrated with their 401(k) accounts and that just as many felt it was “up to them” or they had to “go it alone.” The most common stated frustration related to decision anxiety as well as a lack of understanding and clarity regarding the choices available to them.

As an investment consultant I have heard many of these complaints before and thought it would be valuable for me to provide some general guidance. # 1 – Don’t tinker too much. Your 401(k) account is likely Dollar-Cost-Averaging, meaning you make the same dollar investments at regular intervals over an extended period of time. As such, you are reducing the impact of short-term market swings. #2 – Use a balanced approach to investing. Unless you are very young or within a few years of retirement, a balanced approach that incorporates stock mutual funds, bond funds, and money markets is likely to make the most sense. Of course, keep in mind that all three of these asset classes have varying risk factors, so don’t assume that one definitely has less risk than another. #3 – Pay attention to the underlying fund costs. 401(k) accounts can have many layers of (hidden) fees, all of which will impact your overall performance.

If you have a 401(k), someone is making money off the fees charged to the plan. Therefore, you have a right to expect certain levels of service and investment advice in the form of group meetings and written communication – typically from your plan’s appointed investment representative. Frustrations or concerns should be addressed with your Human Resources group, or plan representative. Another way to ensure you’re making optimal financial decisions is to consult a non-bias third party. If you like, I am happy to review your 401(k) portfolio and options with you.

Christopher Hanly is an investment consultant with Gary Goldberg Financial Services in Suffern and can be reached at (845) 368-2900 ext. 247 or

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