Finally, Clarence, a bit of an old-fogey, decides to take the Twentieth Century Limited to Chicago, where he meets up with famed fee-only financial adviser Roger Wohlner, CFP®. Wohlner reveals to Clarence, “I have several clients who over the years have accumulated 7 figure (or close to it) balances in their 401k plans. None of these clients were senior executives or even high earners. Rather they saved and invested on a regular basis over the course of their working lives and were able to accumulate the funds needed for them to enjoy retirement.” With no 401k, these workers would never have had the chance to amass million dollar retirement portfolios. They would have been more likely to depend solely on Social Security or a potentially meager company pension plan. Thanks to the 401k, though, these folks can live independently through their own means. This is what a 401k success story looks like.Of course, not all believe the 401k has been a positive, but many of these negative stories stem from either employees failing to take advantage of their 401k or plan sponsors failing to follow-through on their fiduciary duty (see “Time Magazine is Wrong!” FiduciaryNews, October 8, 2009). For many, however, their 401k savings have been a boon to their net worth, despite the ups and downs of the market. Perchance it’s best if, on his next trip, Mr. Clarence goes to Washington. It’ll be a shame if Congress tries to “fix” what ain’t broke and penalize working Americans in the name of atoning for its own mistakes.
After all, through these last nearly forty years, the 401k plan has allowed many to live a wonderful life. It’s the gift that keeps on giving.
It takes a disciplined savings strategy and a globally diversified risk adjusted portfolio to successfully retire. Plan sponsors have the fiduciary responsibility to ensure their plan is prudent.
Please comment or call to discuss how you can have your employees telling success stories.
- Are 401k Plan Goals Really an Employer Responsibility? (401kplanadvisors.com)
- Momentum Builds to Place IRAs Under Fiduciary Umbrella (401kplanadvisors.com)
- IRS Announces in Press Release IR-2011-103, Solo 401(k) Plan Annual Elective Deferral Contribution to Increase for 2012 (prweb.com)