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This One Retirement Investing Mistake Could Cost You Thousands… And How To Fix It

Retirement Investing Mistakes

Are You Making This One Retirement Investing Mistake?

Employees that have access to employer sponsored retirement plans have a huge benefit. Namely, the ability to save a significant portion of their paycheck in pre-tax dollars for their retirement. For most Americans their retirement investing will be done primarily through their 401(k) at work.

I’ve said it before and I’ll say it again, “Outside of your home, your 401(k) will likely be the largest asset you will ever own at retirement.” Because of this you must manage it carefully and wisely. That’s why you need to avoid 401(k) mistakes, especially ones that can cost you a lot of money.

If you are like many Americans with a 401(k) through your employer, you probably chose the investment options soon after being hired. Then you quit thinking about it. Contributions go into your 401(k) each pay period (probably once every 2 weeks). And the contributions are allocated amongst the investment options that you set up years ago.

If you are more fortunate you may have a company designated financial planner that you meet with once a year. You probably hate these meetings. Not everyone has someone to meet with once a year. I personally had a 401(k) at a former employer. I can’t recall ever meeting with anyone, EVER.

You Are On Your Own

This means for most people, you are on your own. You must decide what the best investment option is for your risk tolerance and time horizon. You must research which investment options your employer provides will work best for you.

And you must determine how to mix and match these different investment options into a portfolio that truly reflects your needs.

That’s a lot of work. That’s also why it probably won’t get done. Most people are not going to have the time, resources, or desire to sit down and study a lot of investment information. The quality of employees’ 401(k) investment allocation will reflect this.

And more importantly the quality of a person’s retirement will also be affected.

And The One Big 401(k) Mistake Is…

And the big 401(k) mistake most people make is not being aware of what’s going on in their 401(k). Ask yourself this question, “When was the last time you looked at your 401(k) and really analyzed the investments inside it?”

If you’re like most people it was probably a long time ago.

That’s the problem with most employer sponsored retirement plans. The employee is essentially on his/her own when it comes to building the portfolio and staying on top of it.

Don’t get me wrong, I love the fact that most employees have access to a tax deferred retirement plan. It is a tremendous help to their retirement success. But at the same time I recognize that many employees (maybe even you) do not get the necessary guidance from an advisor on what to do with their 401(k). That’s just the reality.

Here’s Why It’s So Important

The 401(k), and other employer sponsored retirement plans, was designed to help you have a better retirement. Not only that, but as you contribute to it over the years it can get really big. And as I said before, it will probably be the second largest asset you ever own (your home being the largest).

If the investments inside your 401(k) are not allocated properly it could have a big negative impact on the success of your retirement.

For example, as we get older a rule of thumb is that our portfolios should become more conservative. This is because as you enter retirement you become more dependent on your investments providing you an income source. And you have less time than when you were younger for your portfolio to recover from a downturn in the market.

If your portfolio is taking too much risk you may be exposing yourself to a potential market downturn right before you are ready to retire. This could potentially delay your retirement date? How would it make you feel to have to keep working because your 401(k) was too aggressively invested and just lost value in a market correction?

Or what about this mistake… Some employees’ 401(k)’s are too heavily invested in their employer’s stock. If the employer comes across hard times their stock price may suffer. What if the employer has to downsize? An employee could find their 401(k) value declining at the same time that they get laid off. Too many eggs in one basket.

These are just some of the mistakes people make with their 401(k)’s. Are you sure that you aren’t making any of these retirement investing mistakes?

Let’s Take Your Retirement Investing To The Next Level

If it’s been a couple of years since you have taken a serious look at the composition of your portfolio inside your 401(k) then I want to help you change all that.

If you need help with your 401(k) then I can help answer your questions. Maybe you want to know if it is still allocated in the right investment options. Maybe you want to know if you are taking too much risk with your portfolio. Or maybe you want to know what a good estimate of what your current 401(k) could grow to before you retire. Then you could have an estimate of what you may have available to retire on in X number of years.

I can help you with that.

If you want to start taking control of your retirement investing and make sure that your portfolio is on the right track to give you the retirement you deserve, then you can schedule a phone conversation with me. You can easily claim a spot on my calendar for a 20 minute phone conversation where you can ask me questions about your 401(k).

To claim your spot today, just CLICK HERE and choose a time that works for you.

Or if you’d like to call our office directly and make an appointment, you can do so at 731-925-8351.

In your service,

Chris Hammond


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Investment Advisory Services offered through Retirement Wealth Advisors, (RWA) a Registered Investment Advisor.  Tri-State Financial Group, and Tri-State Insurance & Financial Services, and RWA are not affiliated. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

This information is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Tri-State Financial Group and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.

Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claims‐paying ability of the issuing company and are not offered by Retirement Wealth Advisors. Chris Hammond is insurance licensed in TN.