If you are participating in an employee-sponsored Roth 401k, do you believe it is your responsibility to manage your funds, or do you prefer to leave it to your employer to oversee accounts?
This question is not intended to make you feel irresponsible. As a matter of fact, your decision to participate in the company retirement program or Roth 401, shows a level of personal responsibility lacking in a large majority of people.
But does it make you wonder about what exactly is happening to your money while it's sitting in the employer accounts?
Of course, you can always look at the account statements and see if your principle is sound and your investments are growing in value. This is usually enough to make most employees quite comfortable when it comes to leaving their money in the hands of their employer.
But other than making sure the funds are withdrawn from your paycheck, there is little else your employer does to affect the growth and security of your funds. This responsibility often falls to a professional financial firm hired by the company you work for.
You may not know it but you pay for these services with money taken out of your investment account. Unfortunately, you seldom get the opportunity to evaluate whether or not their services are worth it.
Fortunately, you do have rights when it comes to the management of your retirement capital.
It is possible for you to meet with the company-hired financial planner on a regular basis to get an accounting of exactly what they are doing. You are also allowed to give them input on managing your personal account.
This rarely-taken-advantage-of opportunity can have a positive impact on the overall performance of your account, especially when these professionals are personally held accountable.
Establishing a working relationship with a professional financial planner can have other advantages.
For example, if you should decide to leave your place of employment, not only can you use the services of the financial planner to help you roll over the funds in your Roth 401k into a private IRA, but they can also help you find the best investments for consistently growing your money until you're ready to use it at retirement.
Now, if you were dissatisfied with the services of the financial firm used by your former employer, you can locate your own. But before you do, be sure to set some standards by which you will make your hiring decision.
As it is with finding any other professional services, it's always best to start with recommendations from people you know and trust. If close friends or family members currently use a financial planner, ask them about this firm's reputation and overall financial management capabilities. Then you can ask for the contact information so you can set up an interview.
During the interview be sure to ask for references and documented proof of success.
Now, if you aren't able to get a recommendation, you can always hire your bank, credit union or insurance company to provide these retirement planning services for you. Since you already have a working relationship with these people you can probably count on them to provide reliable service with satisfactory results.
In either case it's vital that you do your due diligence if you're going to find professionals who can be good stewards of the Roth 401k money you are relying on to provide a secure and happy retirement.
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