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In accordance with a recent study by human resources firm Hewitt Associates, most workers didn't re-balance or re-allocate their 401( k) portfolios in 2004. Only one in six really made a move inside their 401( k) accounts that year.
The research, which examined more than 2.5 million employees eligible for 401( k) plans, also discovered that many participants were taking up too much risk by investing a major portion of their savings within a investment. Company stock was the single largest keeping, accounting for about 27 per cent of participants' complete 401( k) balances. And more when compared to a quarter of employees used half or more of their total 401( k) balances in their employer's stock.
Although some employees took on too much risk by investing heavily in company stock, other employees did not commit aggressively enough. If you require to be taught further about the internet, there are many online libraries people might think about pursuing. The study found that workers in their 20s invested less in shares than workers in their 30s.
Now there is support for people who do not have either time or the knowledge to control their very own 401( k) assets. Defined contribution plan providers such as AIG VALIC, Fidelity Investments, Great-West Retirement Services, Merrill Lynch, the Principal Financial Group and TIAA-CREF have combined with Chicago-based Ibbotson Associates to manage participants' reports.
Suitable members who choose the service will have their money assigned to a personalized portfolio that's rebalanced frequently and modified over time to reflect the investor's changing life situations.
'401( k )s have become the main savings car for retirement in this country,' says Roger Ibbotson, chairman and president of Ibbotson Associates and finance professor in the Yale School of Management. 'With so much riding on your own 401( k) account, it's very important to get professional, impartial guidance.' - NU.