When it comes to investing for retirement, it’s up to you to decide how to manage your plan.
Your company offers a major benefit through its retirement plan — a powerful vehicle that helps you save. It’s up to you to decide how to make the most of its many features, including deciding on your investments. But you don’t have to go it alone… whether you want to “do it yourself,” have a professional “do it for you” or “get some help doing it,” most plans offer a wealth of resources to get you started and keep you on track.
Drive the “car” yourself
If you’re interested in learning about the investment markets and comfortable making the choices that are right for you, you may want to be more involved in managing your plan. When you choose to “do it yourself,” you:
- Mix and match individual funds from your plan’s investment menu.
- Select an asset allocation fund that invests in accordance with your tolerance for risk, and then decide when you want to change to another fund when your risk tolerance or new financial circumstances warrant.
- If you are interested in an “all-in-one” type of investment that automatically invests according to your time horizon to retirement and beyond, you may want to consider a target-date fund.
Uber your future
Would you rather focus your time on interests outside of investing, taking more of a hands-off approach to managing money? Maybe you’re a “do it for me” investor. This option may be appealing to you if your finances are complex. Say your financial goals include buying a first home, having children, or caring for parents. As a “do it for me” investor, you can have an investment professional select and manage the funds in your account for an annual cost and provide financial planning to help you pursue your goals.
Maybe ride-sharing is more your speed
Maybe you’d like to keep control over the funds you select in your account but would like someone to talk to about your decision. This describes the “get some help doing it” investor. Most retirement plans offer access to online advice tools, or a toll-free Call Center that you can call for guidance about the investments offered under your plan, how to allocate them, and when it may make sense for you to re-balance.
Enjoy the journey — and the destination
No matter how you choose to manage your retirement plan, it’s important to stay active and on top of your retirement plan. Remember, it’s very important to:
- Periodically review your portfolio and re-balance to your preferred target allocation if necessary;
- Think about combining accounts to take advantage of potentially lower fees and built-in fund monitoring that’s available in your current company’s plan;
- Update beneficiary designations after major life events (e.g., having a child, entering into marriage, or going through divorce); and
- Choose income options that fit your needs (e.g., systematic, partial, lump-sum withdrawals — or keep investing if you don’t need income right away).