Are you allowing your retirement plan dollars to roll over and play dead?
According to the Bureau of Labor Statistics, the average American will change jobs 12 times in their lifetime. “So what?” you say? Most folks I know leave their 401(K) or 403(B) retirement plans with their previous employer when they change jobs. That could potentially be a big mistake! Let me explain why. First of all, why wouldn’t you want to take possession of your funds if you have the opportunity to do so? Many corporate retirement plans offer only a dozen or so investment choices. You can, and, in most cases, you should transfer your account to an IRA rollover account. By doing so, you now open the entire universe of mutual funds, exchange traded funds (ETFs), and annuities to invest in. So, instead of being limited to 10-12 mutual funds, you now have access to thousands of investment choices, and you take full control of your nest egg — not your previous employer who could go out of business, merge with another company, or get bought.
Here’s another priceless piece of advice: Think long and hard before putting your hard-earned retirement dollars into your company’s stock. Remember Enron? All of their employees lost every cent invested in company stock when it filed for bankruptcy.
Solomon said in Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
That’s sound advice! I’ve seen a lot of stuff happen over my 35-year investment career — recessions, a stock market crash, wars, rumors of war, assassinations, and terrorist attacks. All of these events can have a negative impact on your retirement portfolio. All investments do not react the same way to “events,” therefore, it is wise to spread the risk out over several asset classes, something 401(K)s generally do not allow you to do.
My latest book, How to Be a Great Investor, Investment Techniques for Christians, has a great chapter on portfolio construction, asset allocation, and risk reduction. I encourage you to invest $15.00 and buy the book, so you can learn more about investing. I assure you, it’s money well spent. It’s available on Amazon.
Listen to what Jackie T. from Naples, FL said about the book:
The information was extremely informative to me. We all need Richard’s knowledge and wisdom.
Remember what Ben Franklin said: An investment in knowledge pays the best interest.
Blessings!