At this point, it’s virtually common knowledge that it’s wise to contribute as much as possible to a 401(k). However, selecting specific investments, keeping up with the market and understanding risk tolerance are far more difficult. Learn how professional 401(k) management can help.
5 Key Benefits of Professional 401(k) Management
Regardless of your career, you most likely don’t have the time, energy or expertise to navigate financial markets like a Certified Financial Planner™ Professional. They monitor the markets on a daily basis, allowing them to identify key opportunities and risks to manage your 401(k).
Less Stress and More Time
There are people whose full-time job it is to manage 401(k)s. Professional 401(k) management allows you to focus on other aspects of your life, whether you’re still working or already retired and taking required minimum distributions.
You can be as involved (or uninvolved) in the decision-making process as you’d like.
Your company’s 401(k) provider may not necessarily be providing the best investment advice. Choosing an outside wealth management company allows you to do your own research and select the best fit for your unique financial situation.
Their advice will be objective, since it will not be clouded by anxiety about undertaking additional risk.
Personalized Risk Tolerance
Calculating your own risk tolerance and risk capacity is a complicated process that is not recommended, because it is easy to make a critical error.
A Certified Financial Planner™ Professional has the training to develop a personalized Formal Financial Plan that takes into account your risk tolerance and risk capacity. This Formal Financial Plan changes as your financial situation changes, so it is always up to date.
Adjusted Asset Allocation
In general, it’s recommended to allocate your 401(k) contributions into aggressive investments while you’re young. Then, as you age, contributions are allocated more conservatively.
However, understanding when you’re being too aggressive or too cautious is difficult. A Certified Financial Planner™ Professional ensures you’re on track to meet your financial goals without undertaking an unnecessary amount of risk.
If you’re interested in professional 401(k) management services, we invite you to contact us today.