Avoid These Four Choices on Your Way Toward a Secure Retirement
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A recent survey released by the National Institute on Retirement Security shows that 74% of Americans are “somewhat concerned” or “very concerned” that current economic conditions are affecting their ability to achieve a secure retirement (March 2015). Defined contribution (DC) plans, such as 401(k) plans, are often criticized as a major cause of Americans not being adequately prepared for a secure retirement. However, the poor choices plan participants make, not the plans themselves, are often the true culprits.
Survey results like the one from NIRS, mentioned above, often show workers are not confident they have sufficient funds for retirement. DC plans, in conjunction with social security and other savings, should enable individuals to accumulate enough savings to enable them to have a financially secure retirement. Why then, are survey results so discouraging? Four poor choices made by DC plan participants are often cited as negatively impacting the participant’s ability to accumulate sufficient retirement savings:
- Eligible employees not participating in an available qualified plan.*
- Eligible employees participate in a qualified plan but do not save (contribute) enough.
- Participants make poor investment choices.
- Participants drain their accounts prematurely through loans and other withdrawals.
* Learn ways to increase participation among eligible employees here.
The content on this website is intended for general informational purposes only and cannot be construed as advice or opinion provided by Shea Labagh Dobberstein CPAs, Inc. It is quite possible that the information provided here, while seemingly applicable to your financial situation, is in fact not applicable given your particular circumstances. Any guidance was applicable at the time of publication and may have been superseded by subsequent events and/or legislation. It is strongly advised that you contact an independent advisor before acting on any information presented.