How Professional 401(k) Management May Help Account Performance
If you are looking for a way to improve your account performance, 401(k) management may help you in more ways than you might think.
Although you might have basic investment knowledge, utilizing an expert to make the moves that require skill and care may change the performance of your account from good to great…
And potentially boost retirement savings.
Keep reading for 4 ways 401(k) management may help you have a brighter retirement future.
#1 401(k) Management May Help You Keep More Money
Professional 401(k) management help has been shown to increase 401(k) investors’ returns.
Aon Hewitt and Financial Engines conducted a study from 2006 to 2012 comparing the returns of investors who sought help in the form of online sources or managed accounts to those who managed their 401(k)s themselves.
The study examined the 401(k) investing behavior of 723,000 workers at 14 large US employers.
It showed that people who received professionally managed help earned higher median annual returns than those who invested alone.
In fact, participants who had their assets managed by professionals saw an average of 3.32% (net of fees) more in returns annually than those who managed their own accounts.¹
The study revealed, “If two participants—one using Help and one not using Help—both invest $10,000 at age 45, assuming both participants receive the median returns identified in the report, the Help participant could have 79 percent more wealth at age 65 ($58,700) than the Non-Help participant ($32,800).”²
In a 2019 study titled Advisor’s Alpha, The Vanguard Fund Group, Inc., also reported a 3% average increase in the value of portfolios of clients who have their account professionally managed.³
Take a look below to see the potential of adding 3% more to your 401(k) over time.
See how much you may have at retirement, and how 3% may improve your 401(k) performance. Check out our retirement calculator.
#2 401(k) Account Management May Help Reduce Retirement Stress
One of the top reasons people’s retirement investments underperform in good or bad markets is due to human emotion.
The fear of losing money should the market drop.
The sense of being powerless.
The dread of retiring without adequate savings.
The anxiety over what happened in 2008 (or more recently this past Spring), and the fear of something similar happening again.
No one wants to lose money, but making investment decisions based on emotions may negatively impact your retirement savings.
Professional 401(k) management helps take the emotion out of financial decisions… especially during volatile markets and times of uncertainty.
In addition to managing your investments and quarterly rebalancing your 401(k), professional management may help you stay on course to meet your retirement goals.
Because you have someone there to help wade through rough markets and make decisions based on data and trends, not fear and worry.
With expert advice, you are more likely to make better financial decisions. And, thus, potentially earn more to boost retirement savings.
#3 401(k) Management May Help You Save Time
Managing a 401(k) plan takes time and skill.
And most people don’t have the time (or desire) to learn about investing and rebalancing their portfolio…
Or spend endless hours watching financial news.
401(k) management allows you to have more time to enjoy life while knowing your 401(k) is being taken care of for you.
#4 401(k) Account Management May Help Reduce Fees
Fees hidden within your 401(k) can take away from your investment returns and leave you with less cash in retirement.
In 2015, the Obama administration conducted a study into hidden fees in retirement plans and proposed a ruling that would ensure “retirement savers get investment advice in their best interest, so they can grow their nest egg and be better prepared for retirement.”⁴
In its findings, the White House Council of Economic Advisers (CEA) reported, on average, conflicts of interest lead to…
- 1 percentage point lower annual returns on retirement savings.
- $17 billion of losses every year for America’s families.⁵
Yet, 92% of 401(k) investors have no idea what they are paying in fees.⁶
Unfortunately, figuring out what your fees are is often easier said than done.
Professional 401(k) management can help you identify the fees inside your 401(k) and help you know if you’re paying too much.
Professional Help ‒ No Facetime Required
401(k) Maneuver provides professional account management to help you grow and protect your 401(k) account.
Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that harm your account performance.
Our done-for-you, virtual service allows you to keep your 401(k) right where it is while we review and rebalance your account based on your risk tolerance and current market conditions.
With 401(k) Maneuver, there are no time-consuming, in-person meetings and nothing new to learn…and you don’t have to move your account.
Simply connect your account to our secure platform, and we manage your account for you.
If you are worried your 401(k) is not going in the direction you would like…
Or if you are worried you may have to work much much longer because of the effect the past months have had on your retirement account…
We are here to help.
Click below to book a complimentary 15-minute 401(k) Strategy Session with one of our advisors today.
- Over 90% of Americans make the 401(k) Mistake, Maurie Backman, Motley Fool