Retirement advice is already at your fingertips if you choose to use it. If you are currently participating in a 401(k) plan through your employer, you may be ignoring some helpful investment education tips that are being provided to you for free. What are we referring to?
Most employers are equipped with materials from their 401(k) plan providers to educate employees about the investments available in the 401(k) plan as well as how to determine the right investment mix for you. But research shows that many plan participants either ignore this information entirely or they don't use it as effectively or frequently as they should. At the same time, the retirement advice available can be helpful to participants regardless of their asset level.
In research conducted by the Spectrem Group 56% of plan participants indicated they had received information from their plan provider. Only 12% referred to it on a regular basis. Those with only less than $50,000 in income were the least likely to use the investment education materials.
While sometimes these materials may seem dry and boring, they generally provide a solid foundation for making decisions about your plan investments. Additionally, most plan sponsors have at least one enrollment meeting or other educational meeting each year. This is an important opportunity for you to ask questions. While only 31% of participants believe they have access to group meetings, ask your plan sponsor whether these types of meetings are available. Many times plan providers will do these meetings for a minimal amount, but plan sponsors are reluctant to schedule the meetings.
About 27% of plan participants have access to representatives from the plan provider for one on one counseling. This is a great opportunity to discuss not only how to invest your 401(k) plan assets but how to think of these investments in the context of your overall household financial planning. In fact, some providers have gone as far as providing access to true financial planners. If your company provides this access, take advantage of it. This service costs thousands of dollars if you should pursue to obtain the advice on your own. Research shows that even when this service is available, it is only used by 23% of the individuals.
Go to your plan website. Most providers today have several tools available. You can access research about the investments available to you. There are planning modules that let you project what you should be investing in your 401(k) plan to achieve the amount of income you need in retirement. Many sites offer additional information including savings tips, assistance with eldercare or other issues.
Don't ignore retirement advice and information that is easily accessible. Sometimes refreshing your memory will assist in aiding financial discipline.