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Robert A. Imparato, Jr CFP®
CERTIFIED FINANCIAL PLANNER™ professional
Craig A. Hyldahl CFP®
CERTIFIED FINANCIAL PLANNER™ professional
R.I.C.H. Planning Group, LLC
105 Fieldcrest Avenue, Suite #507
Edison, NJ 08837
Robert: 732-326-5240
Craig: 732-326-5240
Fax: 732-326-5331
Robert: robert@richplanninggroup.com
Craig: craig@richplanninggroup.com
Website: www.richplanninggroup.com
July/August 2018
Beyond Plan Defaults
If you have a 401(k) plan at work, you have a powerful vehicle through which you can save for retirement. Today, more employers are offering automatic tools to help participants put money away into their 401(k)s. While these work for many employees, they may not be right for you. Here’s a look at some of these auto tools and ways you might improve on them.
Auto Enrollment
The idea behind this innovation is that employees fail to contribute to a retirement plan because of inertia, so they are automatically enrolled in the plan when joining the company (with the choice to opt out). Contributing toward your retirement is good, so there’s little to improve on here. You might, however, compare it to a Roth 401(k) plan if you have that option.Auto Contributions
With this option, employers choose the percentage of employees’ salary to initially contribute to a plan. This is often a low number: With many plans, 3% is the default rate. Anything, of course, is better than nothing. But you will typically have the option to raise or lower your contribution on your own. Consider raising it, especially if you’re not putting away enough to match a potential employer contribution match.Auto Escalators
Automatic contribution escalators raise the percentage of salary contributed to a 401(k) plan overtime. This is an attractive way to bump up your retirement savings efforts as you receive promotions and pay increases. You might even decide to raise it more on your own, perhaps up to the maximum allowed by the plan.
Auto Accounts
The default account of the majority of plan sponsors is a target date fund — a diversified fund that includes stocks, bonds and cash. Typically, this is a somewhat conservative way to invest according to your retirement timeframe. However, you may want to choose your own investments if you have a more conservative or aggressive approach to investing.Talk to your financial professional to learn how investing in a 401(k) plan or IRA can help you prepare financially for retirement.
GE-133484 (6/18) (Exp, 6/20)
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Duly registered and licensed financial professionals offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of Utah, LLC in UT; Equitable Network of Puerto Rico, Inc.). Equal Opportunity Employer - M/F/D/V. Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice or services.
R.I.C.H. Planning Group, LLC is not owned or operated by Equitable Advisors or Equitable Network. GE-6572038.1 (4/24)(Exp. 4/26)
CFP® and CERTIFIED FINANCIAL PLANNER™ are certification marks owned by the Certified Financial Planner Board of Standards, Inc.
These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.
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