How to Get the Most Out of Your Employer-Sponsored Retirement Plan with Aaron Pottichen, Ep #75

When is the last time you checked up on your employer-sponsored retirement plan? Dealing with 401K’s is a daunting task, people have so much on their plates already. Learning about all the fees and costs can be a bother. But it is important to know whether your employer-sponsored retirement plan is up to snuff. On this episode of Retirement Starts Today you will learn how to tell if your 401K is a good one and what you can do if it isn’t the best. Aaron Pottichen joins me on this episode to share his knowledge and help you discover if your 401k is the best that it can be. Aaron Pottichen is the Senior Vice President at Alliant Retirement Consulting and is an expert on 401K’s. He consults with employers about their employee benefits. Learn how to get the most out of your 401K on this episode of Retirement Starts Today.

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Outline of This Episode

[4:02] Aaron Pottichen is here to discuss 401K’s
[7:47] There are ways to improve a retirement plan
[8:49] Are Roth 401K’s really rare?
[10:43] Target-date funds, yay or nay?
[19:12] Learn more about Aaron Pottichen

How can people look at their employer-sponsored retirement plan and tell if it is a zero or a hero?

It’s hard to tell right away if your 401K is a dud. 401K’s are designed so that the fees are wrapped into the mutual funds which makes it hard to tell where the fees are going. You need to ask your HR specialist for a full fee disclosure. They can break down where all the fees are going and what all the expenses are. A 401K is the 2nd most important thing an employer can offer their employees, so it is important to know what kind of value you are really getting. You need to find out if the fees are reasonable. Other areas to consider when thinking about your employer-sponsored retirement plan is whether there is an employer match and if your company provides education about retirement plans.

Learn how to tell if your #RetirementPlan and tell if it is a zero or a hero on this episode of #RetirementStartsToday Click To Tweet

What can you do if your 401k is a dud?

There is a lot of potential to improve a retirement plan without having to change the vendor out altogether. It can be an intense process, but there are options. It is important to stay persistent and follow up with your HR department if you don’t have a good plan. You could be missing out on saving a lot of money for your retirement if your 401K is a dud.

Are Roth 401K’s really rare?

Are you familiar with the Roth 401K? More people are familiar with Roth IRA’s rather than Roth 401K’s. With a Roth IRA, there are income limitations, so many people are under the impression that they can’t participate in the Roth option within a 401K. But there are no income limitations on a Roth 401K. The Roth 401K is underutilized mainly because people aren’t familiar with it and also because of the misconceptions about it. Check out the Roth 401K and see if it would be a good fit for you.

Discover what target-date funds are and whether you should love them or leave them on this episode of #RetirementStartsToday Click To Tweet

What are target date funds, and should you love them or leave them?

A target date fund is a fund within your 401K in which all of the money is distributed into only one fund. The money is then allocated between stocks and bonds based on your age. Younger people have a more aggressive portfolio whereas older people have their money invested more conservatively. The target date fund adjusts the risk allocation for you as you age.

In a perfect world, everyone would have a fiduciary advisor and a solid financial plan. But the world isn’t perfect. Since most people lack a basic financial education a target date fund is a good option. It isn’t perfect for everyone, but it removes the natural bias that comes into play when people are investing. The beauty of target-date funds is in their simplicity. If you are interested in a simple, no hassle 401K then a target-date fund could be the answer.