Right now, you in all likelihood find yourself among the masses whose company-based retirement account includes a 401(k). And chances are that you are in charge of this leg of your retirement planning. If so, do you reallocate the assets in your 401(k)? Do you understand risk? Many employees find dealing with a 401(k) plan somewhat irksome. This is way the managed 401(k) is on the rise. The Journal of Accountancy offers this:
“There is absolutely more interest in managed accounts because companies are beginning to realize that self-directed 401(k) accounts are misunderstood by their employees,” says Victoria Serles, CPA, national director of Private Client Wealth Management for BDO Seidman in Kirkland, Wash. “Most employees don’t know how to invest and don’t understand things like asset allocation.”
Find out from your employer if there is a managed 401(k) option. If there isn’t, request one. And take the time to learn investing basics. Even if you do have a managed 401(k) plan, a little extra knowledge won’t hurt.