It may be confusing or difficult for some people to review their 401(k) plans on a regular basis, but failing to do so could cheat you out of scheduled retirement plans. Making regular payments into an account isn't enough, even if it's managed by a company and put aside in a special money market or similar investment portfolio rather than in an account at your local bank. If you aren't keeping track of your money, it may not be growing the way you expect it should.
Losing your money
The problem with unmonitored investment plans is that you don't know where all the money is actually going. According to a recent study by Demos, nearly a third could be dedicated to paying management fees by a third party firm in charge of controlling your portfolio. In a worst-case scenario, up to 80 percent of money put into a retirement plan could actually be going toward paying an investment broker rather than getting saved for your retirement.
A large part of this blindness isn't due to lack of interest, according to MSNBC. In fact, statements and other information previously available to consumers on a regular basis didn't include where allocations were actually being made, so people had no way of knowing if their financial plans were really on target or not.
Recalculating for loss
This may hit some harder than others, as the retirement age is already being pushed back by the Social Security Administration, and people are being forced to work longer than before or accept a reduction in public benefits. According to Entrepreneur, this may actually be a good thing for those whose money hasn't been managed properly and may not yet have enough in dedicated 401(k) plans to retire comfortably.
"Retirement is ultimately a mathematical equation involving current income, current expenses, savings rate and future expenses," said Robert Brokamp in a newsletter for The Motley Fool. "The more you can make now, and the more of that money you save, the sooner you can retire."
If you are not aware of how well their retirement plans are fairing, now would be the time to seek out that information and get more involved in your financial future. If you aren't sure how to change your strategy or what tools would best assist you, seek out financial tips from an experienced planner or banking partner to ensure future monetary health.