Big Picture Needed
Yet, retirement planning should not involve solely relying on your 401(k).
“A comprehensive financial adviser should be looking at all of your accounts,” including a 401(k), said Peggy Cabaniss, a certified financial planner at California-based HC Financial Advisors and past chair of the National Association of Personal Financial Advisers.
Make sure you ask the adviser to look over all of your accounts or at least inform the adviser of the balances in the accounts that you own.
“A lot of times clients don’t know they should ask their adviser to review it,” Cabaniss said. “We may not charge for (401(k) advice), but at least we’ll review it once a year and make sure your 401(k) is invested in the best way possible given the limited choices the company offers.”
Diversification is still key. If you’re risk averse, you may not be taking on enough risk with your assets — and that’s one reason why you may need financial advice.
“How diversified are you in different sectors? How much homework are you willing to do and how much time are you willing to spend on it?” said Lori Schock, director of the office for investor education and advocacy at the Securities and Exchange Commission.
These are some of the key questions to ask yourself, said Schock. “If you’re not willing to do this, it may be worth having a financial professional at least give you a check up every three years or so.”
Just make sure you don’t overpay for the advice.
“If you’re just dealing with a 401(k), I would look for an adviser who would charge me hourly or a one time fee,” said Schock. “You don’t want to pay an exorbitant amount for stock picking advice, when there are only 10 mutual funds to choose from in the 401(k) plan.”
Investors need the guidance of a fiduciary advisor to control their emotions and stay disciplined to a prudent strategy. Reaching your long term goals requires the objective advice of a fiduciary adviser.
Please comment or call to discuss how this affects you and your financial future.