Smart401k Blog

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I’ve had several recent conversations about the lackluster performance we saw from most sectors last year.

Discussions start with someone expressing frustration about slow investment growth, and they devolve into a round of Twenty Questions about big returns.

In retirement investing, there will be up years, down years and flat years. I know it’s easy to become frustrated like these folks. However, when you start to feel blinded by a hunger for big growth, I encourage you to read through this particular set of posts from the Smart401k blog rather than seeking information about the next big thing. And think about this investment:

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Human resources consulting firm Aon Hewitt (www.aonhewitt.com) just released a study that delved into employee retirement benefits. The firm surveyed 210 mid-to-large U.S. companies representing 6.2 million workers.

The results revealed that just 38% of employers are confident that workers are taking accountability for their financial future, down from 43% in 2010. Further, only 30% of companies are confident employees are sufficiently prepared for retirement, showing no improvement from 2010.

In other words, companies believe employees are not in control of retirement planning, even though 401(k) plans and similar self-directed work retirement plans are designed to put employees in control. What this tells me is that employees – you, me and everyone we work with – need to take control of retirement planning because no one else is going to do it for us.

Perhaps that’s easier said than done. I think surveys are most useful when the findings are actionable, so here are … (more…)

The news has been filled with stories about debt. Some of us have bitten off more than we can chew.

Lots of families and individuals (and companies and governments) are awakening from a spending frenzy that, in some cases, was decades-long. Now we’re trying to shape up and settle up. If you’re in that boat, how do you balance your debt repayment strategy with your retirement savings strategy? (more…)

I recently received a call from John Smith (I changed his name to protect his privacy). John had stopped contributing to his 401(k) about five years ago, and he called us while researching whether he should resume contributions. John wanted me to sell him on the idea that he should contribute again to his retirement plan – so I did. I want to share our conversation because I know there are many other people out there in John’s shoes who have settled for inappropriate funds or given up investing out of frustration.

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Recent years have been bumpy for the market, and following a long-term strategy has helped lots of folks stay even-keeled and wisely invested – including me. It wasn’t always easy to watch the market’s ups and downs. But I’ll keep doing what I’m supposed to do so I can stay on track with my retirement strategy.

So what did I do right? There are five basic things I’m thankful I did.

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For most people, a work retirement plan will be the primary investment vehicle used to save for what we all hope will be a long, exciting and fun-filled retirement. With the uncertain future of Social Security, and the rapid decline of pension plans, individuals are more responsible than ever to fund their own retirement. As we approach 401(k) Day, we at Smart401k thought it would be a good time for a refresher on the importance of participating in your company-sponsored retirement plan and the benefits you receive.

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The recent economic downturn has forced many companies to consider making spending cuts and as a result a growing number of firms have decided to suspend their retirement plan matching contributions. Since this is a growing trend, I thought I would take the time to go over what you can do if your company has or is in the process of suspending their matching contribution.

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