Are you getting the right advice about your 401(k)?
If you hope to retire early, you need your company retirement account to earn as much as possible as quickly as possible without taking big risks. More employees are hiring outside advisors to help them manage their 401(k)s, says David Wray, president of the Profit Sharing/401(k) Council of America. These personal planners offer much more customized attention than the educational material, interactive Websites, 24-hour help lines and even third-party consultants.
Jim Kruzan, head of Kaydan Group of Clarkston, MI, says, "An early retiree probably shouldn't have much invested in cash just as he's about to leave the company. A good chunk of that money has to last another 30 to 35 years, so the portfolio still needs plenty of growth."
If you're thinking of springing for a 401(k) advisor out of your own pocket, use these questions to help find one who's right for you:
1. How well does the advisor know your plan? Ideally the person should be familiar with or willing to learn about how your 401(k) works and the investment choices available.
2. How will your adviser find the right investment mix for you? Smart asset allocation and consistent rebalancing are the main investing strategies that can make early retirement a reality.
3. How closely will the adviser monitor your plan? Through the Internet, 401(k) investors can keep an eye on their account daily if they so choose. Your advisor should be watching regularly, too, and sending you alerts if you need to rebalance or make other changes. In most cases, advisers do not actually make the trades, but rather notify you, then follow up to be sure you've pulled the trigger.
Source: BusinessWeek, July 9, 2007
Come to the Summer Carnival!
The first Baby Boomer, A New Jersey mother and grandmother turned 61 on New Year's Day, 2007 and she has the distinction of being the very first Baby Boomer.
Kathleen Casey-Kirschling, of Cherry Hill, N.J., was born one second after midnight on Jan. 1, 1946. During this era, an American baby was born every eight seconds.
Visit the Blogging Boomer Carnival #29 and join other boomers in taking the rides of their life.