Planning Cent$
Question:
What are the likely culprits that will diminish or significantly affect the growth, and ultimately the ‘final’ balance, of my 401(k) savings account?
Answer:
Naturally, we cannot cover every factor that would negatively impact the growth of your 401(k) savings account. We have listed the most common here for your consideration. We have purposely left out those situations that are out of the control of the individual participant, ie market and economic forces. This exercise is to consider those things we essentially do to ourselves.
1. Loans
2. Hardship Withdrawal
3. Long Term Care Expenses – An event which would require the need for Long Term Care benefits is certainly outside your control. However, the likelihood of an event and the potential impact on your retirement savings could be dramatic. We encourage participants to view this as something in their control.
4. Saving too little
5. Starting to save too late
6. Not saving up to the limit of a match if it is provided by the employer
7. Being too conservative in your investment allocation
8. Being too aggressive in your investment allocation
9. Failing to diversify
10. Not rebalancing your account as your life’s circumstances change
If you feel that any of these factors apply to you, please call our office to speak with a plan advisor. Retirement planning is a work in progress and specific to each individual. We would like the opportunity to help you find the greatest value in your company’s 401(k) Savings & Retirement Plan.
Fun Fact:
“There’s a $1 bill and a $2 bill. How about a $3 bill? There actually was a $3 bill in the early 1800s, but only a few were ever printed by banks.” (source: EdwardJones, Financial Trivia Just for Fun, August 2010)
If you have a question, please send it to or give us a call at (630) 887-8400. We will answer your question directly and privately. If we believe it would help other 401(k) Plan participants, you might find it in a future Planning Cent$ bulletin (anonymously, of course).
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Securities offered through Commonwealth Financial Network®, Member FINRA/SIPC. Fixed Insurance products and services offered through Stephen M. Wendt & Associates, Inc.