Advantages of Employer - Sponsored Retirement Plans
Being in the financial planning business for as long as we have, we often encounter unique situations that offer an opportune learning experience for ourselves and our clients. Not wanting to keep these valuable lessons to ourselves, we've decided to "share the wealth" with you going forward in hopes that you will also find this information useful. Welcome to The Pitti Group - Case Study Series!
One of the most important steps in saving for retirement is making sure you're taking advantage of an employer-sponsored retirement plan like a 401(k), 403(b) or 457. These types of investment accounts are designed to offer a number of advantages that seeks to make almost universally beneficial to an investor that's looking to save for retirement. These types of retirement accounts can potentially lower your taxable income while also providing tax deferment on any gains recognized within these accounts. If you do contribute to an employer-sponsored retirement plan, you may want to consider having us review the investments for you. We've encountered several people over the years that didn't realize what they were invested in or what their options were within the account.
- For example, some of the situations that we've encountered involved some individuals that thought they had changed their investments to a more conservative allocation, but didn't realize they had only changed which investments their future contributions go into and not their current holdings. This could be problematic since the majority of this person's assets were still invested aggressively and not in line with this person's risk tolerance.
- We have also seen people that have signed up for an employer-sponsored retirement plan and didn't realize that their default investment selection was too risky or too conservative for them.
- We met with someone that was invested 100% in a stable value fund and didn't realize it. A stable value fund is essentially an ultra-conservative fund that barely returns more than cash. This client was very surprised that they were in this fund for over a year and didn't realize it.
- It's also possible that there are lower-cost investment options within your retirement plan that you're unaware of. We would be happy to review your employer-sponsored retirement plan to ensure that you are invested appropriately and that you are maximizing your retirement savings potential.
As always, we're here to help. Let us know if you have any questions or if you would like to schedule a time for us to review your retirement account.
These case studies are provided for illustrative purposes only to provide an example of the firm’s process and methodology. The results portrayed in this case study are not representative of all client situations or experiences. An individual’s experience may vary based on his or her individual circumstances and there can be no assurance that the firm will be able to achieve similar results in comparable situations. No portion of this case study is to be interpreted as a testimonial or endorsement of the firm’s investment advisory services. Additionally, it is not known whether the clients of these case studies are based upon, or approve of the firm or its services. The information contained herein should not be construed as personalized investment advice.
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor. The Pitti Wealth Management Group LLC (“Pitti”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Pitti and its representatives are properly licensed or exempt from licensure.