What You NEED to Know About Your Retirement Plan

401k Advice - What You NEED to Know About Your Retirement Plan
By Garrett Gunderson

Many Americans have been looking for 401k advice because many have lost much of their retirement savings in the current economic downturn. With this happening so rapidly, it's been a wake up call that may be exposing the truth about retirement plans that have been misrepresented and often used to the advantage of banks and large corporations (but not you the person contributing the money).

There are several very critical things that may go against the 401k advice that is given in the main stream media, but that you must know to make good decisions about your future investments. The following are a 3 little known facts that will help you make a more informed decision about what to do with your investment dollars:

1) Poor Liquidity. Traditional 401k advice has failed to mention that there is a cost to having your money tied up in a qualified plan. There are numerous penalties and restrictions that limit your options if you ever want access to your money.

2) Your Money is dependent upon the performance of the market. Most people have realized that their investments are tied to large companies and markets that the regular investor knows very little about. This means that you, as an investor, don't know what is happening with your funds, or how to make a change if the market should take a dive. This is similar to driving blindfolded and hoping that someone will make sure that you get where you need to go in the future.

3) Undisclosed Administrative Fees. According to a report by 60 Minutes recently, there are around 12 undisclosed fees on most qualified plans. However the 401k advice that most people get never mentions how these fees can significantly decrease your overall earnings and retirement funds.

I can't emphasize enough how important it is to realize what is happening when you put money into investments. If you aren't in a plan that you understand completely, then you should look at other alternatives. The 401k advice given by the media may lead you to believe that it is a "One Size Fits All" solution, but does it make sense that the same plan would be best for everyone (no matter your situation?) The best bet is to become educated on your options and understand what you are doing with your money. Otherwise you are risking your dollars unnecessarily by turning off your brain and accepting traditional 401k advice as unquestioned truth.

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