Quick Guide to Choosing a 401k Advisor


For most people, retirement planning is about as much fun as, say, poking a stick in their eye. It can also feel overwhelming if you’re not well versed in financial matters.

That’s why it’s very important for you to feel not only that your retirement planner or 401(k) is knowledgeable and experienced, but that you feel comfortable with him or her and that they have your best interests at heart.

Here is some helpful information about retirement planning and choosing a 401(k) advisor.

One of the first things you want to do is to make sure to do when you begin retirement planning and start speaking with any 401(k) advisor is to be upfront about your retirement goals and needs. He or she should be open to these things and not pressure you or try to hard sell you in any way.

Your Advisor’s Background
Another thing you want to do is ask about the 401(k) advisor’s background. A chief question to ask is how much of his job is directly related to retirement planning. You also want to know how many years’ experience he or she has. The more experience they have in retirement planning and as a 401(k) advisor, the better. This ensures that they’ll likely know the ins and outs better than someone just starting out.

Check the Credentials
You also want to know they’re credentials. Certified financial planners generally are able to offer the best retirement planning advice and 401(k) strategies. And watch out for investment advisors, particularly registered ones. They’re advise on investments could be biased, and with so many excellent financial planners out there, why risk it?

Understand the Fees
Knowing how a retirement planner or 401(k) advisor will be paid is also important to know. As a general rule, his or her fee should not vary according to the funds you select for your 401(k). If it varies accordingly, it’s probably a good indication that the retirement planner/401(k) advisor may not be as objective as you need them to be when it comes to helping you choose the right investments for you.

Stay Involved
Finally, make sure any retirement planner, certified financial planners, or 401(k) advisors you work with keep you involved. Yes, it’s nice to just hand everything over to someone and let them take care of it. The problem, especially when it comes to 401(k)s and retirement planning is that your tolerance for risk and your life situation should always be taken into consideration. And cookie-cutter 401(k) strategies aren’t always the best.

So get and involved with your retirement planning and 401(k) strategy. This guarantees that your retirement planning is designed for the right person — you.

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