Using an Advisor to Make the Most Out of Your 401(k)

Modern financial instruments have shifted substantially when it comes to retirement. In the past, the focus was using a defined-benefit plan, today, more advisors are leaning to a defined-contribution plan. While it’s arguably a change for the better, a 401k advisor in Palm Beach can help you understand the implications of these changes and make the most out of your retirement plan.

How does this work? With a defined-contribution plan, you can opt for a self-directed brokerage account (SDBA). What this means is that you can hire a professional advisor to better optimize your retirement plan.

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So, why should you hire a personal 401k advisor when your employer can do it for you? Here’s what you need to know.

The 401k Advisor of Your Company

What many employees may not know is that they are already paying management fees for the 401k of the company. However, the employees are not getting personalized guidance for the management fees that they are paying.

Moreover, the obligation of the 401k advisor is to select an investment plan that benefits the largest number of people. This means that the 401k advisor the company has hired has the best interest of the plan sponsor in mind, the employer. Not the employees.

So, while the company’s 401k plan may perform well as a whole, it may not be the ideal retirement plan for all the employees at an individual level. Moreover, if the head of the company is not too financially savvy, the advisor can even select a 401k plan that doesn’t have the best interest of the company in mind but appears to do so.

Having Your Own 401k Advisor

You unlock a universe of options if you decide to hire your own 401k advisor. Just to start, having your own 401k advisor will allow you to have a plan that enables your investments to work towards all of your goals.

Moreover, if you have multiple plans, an advisor can comprehensively look at all of them to integrate them all to achieve your desired outcome. Your personal 401k advisor can also cost you less than than other investment planning options.

Payment in plan investments include:

  • Employer’s registered investment advisor
  • Fees charged by mutual funds

So, while your personal 401k advisor can cost you around 0.5% to 1% of the assets managed, it may still be less than what you could be paying on planned investments.

Looking for a 401k Advisor in Palm Beach?

It’s important to have your own 401k advisor in Palm Beach if you want to ensure that you’re getting the most out of your retirement plan. As you age and earn better income, your goals can change.

Having your own 401k advisor can help you stay on track to meet your goals regardless of what changes life may bring.

You can start to experience the benefits of professional financial guidance today. Hire a 401k advisor in Palm Beach now to restore agency in your finances.

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