Objective information about retirement, financial planning and investments


Your 401(k) Don’t Set It and Forget It


Those who follow this blog and/or follow me on various social media platforms know that I am not a huge fan of Target Date


Funds. I discuss some of these concerns in a recent post.

Beyond that, however, the whole notion of taking such a hands-off approach to investing for one’s retirement just rubs me the wrong way. I’m all for making this as easy and painless as possible for plan participants, but simply putting one’s money in a TDF can foster the idea that doing so will magically get you to where you need to be at retirement.

Retirement planning takes work. Whether you do it yourself or use a financial advisor you need to track your progress at least annually. Moreover, you need to start out with a goal. That goal should be something like I need to accumulate $x by this date. Ideally along the way you will be tracking your progress by setting interim accumulation goals. Many retirement planning software programs allow for this type of analysis.

Allocating your 401(k) account should not be done in a vacuum. Instead, make sure that your 401(k) is allocated as part of your overall portfolio. This might include a spouse’s 401(k), IRAs, taxable accounts, stock holdings, bonds, mutual funds, etc. Your overall investment strategy should be an outgrowth of your financial plan.

If you have questions about your 401(k) or any part of the financial planning process please feel free to contact me  for assistance. Please check out our Resources page for more tools and services that you might find useful.

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  1. Melinda Hancock says

    Great post! After a serious search I choose to go with a fairly new type of an advisor. I am not wealthy but I understand the value of consulting with the people that help you build you wealth in a fair way. People’s Financial Advisor (http://www.peoplesfinancialadvisor.com) are Fee-Only certified planners and registered with the SEC. They offer a free financial assessment (everyone should at least do that) and a full financial plan for $99. The entire interaction is on-line; I had an interview on their website and after several days got a full report that talked to me in plain English about my situation. It’s worth every dollar I paid for it.

  2. Melinda thanks for your comment. People's Financial Advisor looks like an interesting service and I'm glad to hear that you had a good experience. It also looks like they are fellow NAPFA members as well.

  3. Thanks for the great information on how effective retirement planning software can be for those who want to make goals and evaluate benchmarks on an annual basis. Very helpful and insightful for effective progress toward retirement plans. http://www.financialprose.com

  4. Thank you for your comment and for visiting the site.


  1. […] enviable sums for retirement via regular contributions to their 401(k) plan.  While the 401(k) sometimes gets a bad rap from the financial press it can work well for those who take full […]

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