If you haven’t recently, take a minute in the next few days to go online and log into your company 401(k) retirement plan account.
If you don’t remember your log in, password, and security question, you are going to need extra time to call the 800 number for your company 401(k) retirement plan provider. After you navigate a very frustrating menu of options, the youngster that finally answers the phone will be happy to help you gain access to your account.
When you finally can view your current company 401(k) retirement plan balance, let me add my congratulations. You very likely are looking at an all-time high account value for your retirement savings.
The current all-time highs don’t come without responsibility. If you are within 10 or so years from your desired retirement date, you need to think about a very important set of company 401(k) retirement plan investment management decisions going forward.
In fact, these decisions will likely directly affect your final retirement savings balance.
Here is a short list of the questions you need to start thinking about.
“Should I stay 100% invested going forward, and hope that the U.S. stock markets rise even more?”
“Should I take some profits close to these all-time highs, and preserve the last several years of my stock and bond market investment gains?”
“How much stock and bond market investment risk am I comfortable taking over the last few years of my working career?”
You don’t have to “time the market.” There is no reason to sell your company 401(k) retirement plan mutual funds tomorrow morning. But you do have to give strong consideration to the investment management strategy you have in place when the stock markets fall and interest rates rise.
The run up in the U.S. stock market averages has been remarkable by any measure. The only thing more remarkable has been the fact that U.S. interest rates have gone down, and stayed down, for the last several years.
The era of a successful “buy-and-hold” and pay-no-attention company 401(k) retirement plan investment management strategy will come to an end at some point.
U.S. stock and bond market history is full of examples of years of huge paper profits lost by individual investors who did not pay attention to changes in stock and bond market risk levels.
Work a little harder now at managing your all-time high company 401(k) retirement plan account. Or think about engaging a third-party professional who can diagnose your biggest company 401(k) retirement plan risks.
From July 2008 to March 2009 individual company 401(k) retirement plan participants lost close to 50% of their account values. What would happen if you had to retire in the next few years after a similar disaster?
There is no need to take unnecessary company 401(k) retirement plan risks so close to your desired retirement date. You don’t have enough time left in your working career to make up historic losses going forward.
Ric Lager
Lager & Company, Inc.
