Help Is on the Way for 401(k) Investors Plans

Help Is on the Way for 401(k) Investors Plans

More employers are educating employees on 401 (k) Investors Plans  – from the benefits of tax-deferred growth to the significance of consistent saving. However, research shows that workers are still in the dark when it comes to investing their assets in 401(k) Plans. 

According to a recent study by many human resources worldwide, most workers didn’t rebalance or re-allocate their 401(k) Investors Plans portfolios or 401(k) like plans in other countries. Only one in six actually made a transfer within their 401(k) Plans accounts every year.

The study, which examined more than 2.5 million employees eligible for 401(k) Investors Plans, also found that multiple participants were taking on too much risk by investing a substantial portion of their savings in a single stock. Company stock was the single largest holding, accounting for approximately 27 per cent of participants’ total 401(k) Investors Plans balances. And more than a quarter of workers held half or more of their total 401(k) balances in their employer’s stock. 

While some employees took on too much risk by fund investing heavily in company stock, other employees didn’t invest funds aggressively enough. The study found that employees in their 20s invested less in equities than workers in their 30s.

Also Read: How to plan financial freedom on passive income

Now there’s support for investors who don’t have either the time or the expertise to manage their own 401(k) Investors Plans. Determined contribution plan providers such as AIG VALIC, Fidelity Investments, Great-West Retirement Services, Merrill Lynch, the Principal Financial Group and TIAA-CREF have partnered with Chicago-based Ibbotson Associates to organise participants’ accounts.

Eligible participants who select the service will have their money allocated to a custom-made portfolio that is rebalanced regularly and modified over time to reflect the investor’s changing life circumstances. 

Also Read: What are the risks of investing

401(k) Plans Investors are becoming the primary savings vehicle for retirement in this country. Also, there are many countries like India, China, and South Africa where now people are started investing their funds in retirement plans. With so much riding on your 401(k) account, it’s very necessary to get professional, unbiased advice from Authenticate sources and well manage fund houses.

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