Pick and Choose
It is a well-established fact that the most critical decision participants make regarding their retirement security has very little to do with what investment funds they choose: It is their rate of deferral/savings. Notwithstanding, the decision that most participants appear to agonize over most is which investment funds to choose.
Furthermore, participants who are intimidated by the process of having to make that investment choice may very well avoid that most critical first step—deciding to save in the first place.
In this month's Know How, we try to help participants get past that initial stumbling block with a simple age-based estimation for stocks versus bonds. It is no substitute for a skilled investment professional's assessment of funds available in conjunction with a sophisticated risk tolerance questionnaire.
It is, however, a better alternative than "Joe" over in Receiving who acts like he knows everything—and it should help participants take that first important step on the path toward a happy and satisfying retirement. As always, we look forward to your comments and feedback.