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How to Select the Investments in Your

Employer’s Retirement Plan

 

Greetings!

Whether they have a 401(k), 403(b), 457, or other employer sponsored retirement plan, one of the first questions people typically ask me is, “How should I invest the money in my retirement plan?” Your investment options are typically limited and often come with little or no advice from a professional.

Consult your 401k representative: If you contact your human resources department, they’re likely to provide some fact sheets on the investments in your plan but little beyond that. If you contact the 401k company, they’ll likely do the same. I suggest contacting the plan representative. This is the person who comes to your office to present market updates and information specific to your retirement plan. S/he should be able to sit down with you in a private meeting to discuss your risk tolerance and time frame. From there s/he should be able to help you select some of the specific investments that you can use.

Do it yourself: If you find that your plan representative is not responsive or helpful or if you enjoy doing it yourself, you may chose to select your own investments. Rather than simply picking the best performers for your portfolio, consider several factors. First, what is your risk tolerance? You should be able to go online and complete a brief risk-tolerance questionnaire that may provide some guidance to you as far as how much to invest in stocks versus bonds.

Second, does your plan allow for employer stock? Be cautious of investing too much into your company’s stock in your 401(k). Think Enron, Worldcom, etc. While there’s nothing wrong with believing in your company, you may want to limit your employer stock holdings just in case.

Third, how do you balance your plan’s investments? Decide if you want to create a full portfolio balance (factoring in your other investments such as a rollover IRA, Roth IRA, or brokerage account) or to create a plan just for your employer sponsored retirement plan.  After you decide which route to take, contact your HR department for a listing of your investment options. You may also find this list in a recent account statement.

The investment options are likely broken down by asset classes (large companies, medium, small, international stocks, bonds, etc). Pick the investments that you believe will suit you best in each asset class that you need (per your asset allocation in step 1).

Annual Checkup: Just because you set the initial mix (either with the assistance of a professional or on your own) doesn’t mean you can put the plan on cruise control and forget about it. Ideally you should do an annual review. Have the investment options changed? Do you now have too much in one asset class (or too little)? Has your risk level or goal changed? Have the investment options changed? Just as you would with your car; do some fine tuning to your portfolio on an annual basis.

When doing your annual checkup, you may want to do a beneficiary review on your plan as well as your other employer benefits. Things in life change, and we often forget to make adjustments to our insurance and investment beneficiaries when we get married, divorced, or after someone passes away. Don’t be the person who leaves their retirement plan to their college sweetheart instead of their spouse.

The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual. Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation.

All investing involves risk including loss of principal.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform an undiversified portfolio. Diversification does not ensure against market risk.

 


PWM

partnership wealth management company for gay couples

Events & Sponsorships

Paws for a Cause

Thursday, September 6th from 5-8pm

The Thirteenth Annual Paws for a Cause Charity Night & Silent Auction will benefit Animal Safe Haven & Adoptions, Show Your Soft Side, and Furry Friends Network.

This year’s event will feature guest bartenders, brewery tours, animals brought by the charities, a silent auction, raffles, games, BMore Greek food truck, and more!

You can follow Paws on Facebook at Paws’ Facebook Page for regular updates.

Catonsville Arts & Crafts Festival

Come out and wish Debbie well at her first marketing event. Debbie and I will have a booth at the 45th Annual Festival between 10am & 5pm on Sunday, September 9th. Learn more about the event here.

 


Away from the Office

Monday, September 3rd

Our office and the markets will be closed for Labor Day. Have a wonderful weekend!

Monday, September 17th 

Woody will be out of the office on the 17th. Please contact Debbie at debbie@partnershipwm.com or by calling 410-732-2633 for immediate needs.

 

We are always accepting donations for the local animal shelters – toys, tennis balls, collars, leashes, food, cat litter, cardboard trays, office supplies, cleaning supplies, towels, mats, washcloths, etc. We will accept donations Monday-Friday between 9am & 5pm.

Family

 

Partnership Wealth Management family

 

The summer heat contributed to an unusually slow month for us. We made it to the pool as often as we could and attended several parties thrown by Elise’s friends. It was nice having a few weekends at home before a packed and exciting September.

 

One of the best parts of August has been Fenway’s recent puppy spell. It seems as though the pain in his hip/leg has subsided enough for him to be full of smiles and wanting to play. It’s absolutely adorable to watch a nearly 13 year old dog crouching down like a puppy and asking to play fetch.

 

I hope you enjoyed this month’s newsletter.

 

Best Wishes,

Woody Derricks, CFP®, ADPA®

President

CA Insurance License #0C40217


As a Registered Investment Advisor (RIA), Partnership Wealth Management is committed to providing our clients with financial planning and wealth management services to help them work towards their financial goals. At Partnership Wealth Management, we have a long history of working with the LGBT community. Among the many services we offer are financial planning and estate planning strategies for gay and lesbian couples. Financial planning is an important part of preparing for the future; contact us today to get started.