Losing Confidence In Your 401(k) Retirement Fund?
Between 2007 and 2009, many near-retirees have had their confidence blown to pieces as they’ve watched their 401(k) retirement funds stagger under the strengthening recession. As they near their retirement age, many baby boomers are desperate for a sense of security, as there’s no guarantee that their retirement savings will still be there. In fact, many financial experts agree that the 401(k) system has some serious flaws, many of which have only been revealed thanks to the credit crunch.
Near-retirees are in a delicate position as they near closer to their retirement age, as managing a 401(k) retirement fund quickly becomes a burden that many investors are not financially savvy enough for. Even if a retiree works with a registered investment advisor, there’s no certainty that a downturn in the market won’t half a retiree’s precious savings within a year or less.
The government is searching for a way to overhaul the 401(k) retirement system as economic conditions continue to bring its flaws to light. One proposition that’s making its way around Congress is to set up universal retirement savings accounts that the government would make contributions to, with a low yet fixed rate of return.
While the federal government continues to seek answers that will help the 401(k) system in a future crisis, it’s still important to understand the risks and benefits of your own 401(k) retirement fund. Many consumers are understandably afraid of making any more contributions to their retirement savings, given the poor marketing conditions – after all, the health of your portfolio tends to depend on the health of the stock market itself. However, the 401(k) system is still performing as it should; i.e. it’s generating significant savings for future retirees. Even if your 401(k) retirement fund experiences losses due to the poor conditions of the market, there should still be a significant bottom line – additionally, once the market recovers (as it’s bound to do), you can recoup losses by continuing to make safe investments with the help of an investment advisor.
For more information on smart retirement planning, visit www.kenhimmler.com, the IRA and 401(k) experts!
Authored by Kenneth Himmler, Sr.
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