When you think about choosing your investment options for your 401(k), do you start to feel intimidated, nervous or even downright anxious? We understand. Making serious financial decisions that can have a major impact on your life is nerve-racking, and when you have no background in or any particular knowledge of the financial world and how it works, it can be especially daunting. That’s why at 401GO, we provide participants with a guided portfolio builder to help them select the funds that would best serve them in meeting their long-term goals.
One of 401GO’s primary goals is making investing easier — for companies and their employees. Our automated guided portfolio builder can quickly assist users in making the types of selections they may not be comfortable making on their own.
Choice overload is real, and although it has become more prevalent since the dawn of the internet, having too many choices has been an American problem for a long time. While some consumers have more trouble making decisions than others, the fact is that the more choices you have, the more difficult it can be to decide. No matter what you’re buying, you want to make the best choice for you. At 401GO, we offer many more choices than other plan administrators — well over 100.
While investing in any of the options we provide is infinitely better than putting your money in a bank account, under your mattress or into your brother-in-law’s latest startup, it’s clear that some options are better for some investors than others. How do you know which are best for you?
Ask the Portfolio Builder
When you use the 401GO portfolio builder, it automatically takes into account such factors as your age and the age at which you expect to retire. It’s critical to consider how long it will be before you will need your retirement funds — the closer you are to retirement, the less risk you want to take on.
For many workers, a 401(k) is their first foray into investing, and at 401GO, we want that to be a good experience — free of angst and regret. To accomplish this, our automated portfolio builder holds your hand through the process, asking you important questions that help us determine your capacity for risk. Next, our algorithms build a customized portfolio, based on all the relevant criteria. All you have to do is watch your money grow!
Getting Comfortable with Investing
Whether your 401GO portfolio is your first time investing or you have been investing for years, know that our guided portfolio builder is an option you have — not a requirement. You can devote as much or as little time and energy to the process as you want. For instance, you can use our guided portfolio builder and then opt not to invest in the funds it recommends. Or you can accept some, but not all, of the recommendations. Or you can build your entire portfolio on your own.
What makes the 401GO system so advantageous is that you can make changes to your portfolio whenever you wish. You are not tied to any single fund for any period of time. Thus, you may want to start investing with the guided portfolio builder, then over time, as you learn more about investing through your own research, you may opt to make changes.
The Rewards of Investing
Time was, an employee’s retirement was funded by their company’s pension plan (if their company had one) instead of a 401(k). In the best-case scenario, employees enjoyed a comfortable retirement, funded by their employer. In the worst-case scenario, the employer went bankrupt before or during the employee’s retirement, leaving them in the lurch. With the passage of the law now known as ERISA in 1974, pensions had to be insured, guaranteeing employees’ benefits. Shortly thereafter came the birth of the 401(k) plan, an alternative that was easier and cheaper for companies to manage than pensions.
While some may lament the demise of pensions which lay all risk at the feet of the employer, one big advantage of a 401(k) plan is the control it hands over to employees. Although employees take on more risk, they may see much larger returns on their investments as well.
Regardless of whether the investments pay moderately or handsomely in retirement, the choice lies wholly with the employee, which is how many investors prefer it.
The Role of Financial Advisors
As much as we like to extol the virtues of choice when it comes to your investments, we want you to know that you are always free to use your company’s financial advisor to help you make important decisions with respect to your 401(k). We can grant access to your account to your employer’s financial advisor so they can see what your investments are and how they are doing. Your advisor may recommend you stay the course or make changes to better meet your financial goals.
Start Early for Best Results
Your employer has chosen to work with 401GO to provide you with an important benefit — the opportunity to invest in your future. A secure retirement greatly improves quality of life. We have provided our guided portfolio builder and we offer affordable investments as a way to encourage plan participation. With a greater pool of participants, more favorable outcomes are possible.
Get your recommendations from our guided portfolio builder today, and enjoy the benefits of a customized retirement plan for life.