Mark Wayne, President and CEO of Clarkston of Freedom One Financial Group. He's a 401K plan advisor who is what's happening with 401K plans and what you need to be doing now -- to ensure financial success in your future.
Play the video to get his insights as he talks with Fox 2's Murray Feldman.
Points to watch for:
Employees at companies should already have signed a fee disclosure document.
This is part of financial reformallowing employees to see what fees are coming out of their plan.
80% of employees who have these plans think they are free.
These disclosures also brought to light the fiduciary responsibility of employers. Forced them to take a look at their plans performance and cost.
This is important—employers (and many don't know it) act as a fiduciary when it comes to their employees' 401K plans.
Like the mortgage industry, these changes are great to protect the consumer. There was a time when many companies were in the business of managing 401Ks, not any more.
How do you know if you are on track for retirement?
Employees need to get proactive and monitor their progress.
They also need to be asking their employer two things 1). Am I on track for retirement 2)? If I am not on track for my future goals, how do you suggest I get there?
Saving in a 401K plan is an exercise where we all have a clear goal in mind—creating a safe retirement;
This is also a benefit to employers—having a workforce that is ready to retire when it is time.
A very small shift in what you are saving— even one percentage point — can greatly boost your balance at retirement.
When you get a raise, pay yourself in the future by raising your retirement savings contribution; Most employees tell our employee educators they don't notice the small shift and continue to increase their percentage as a result;
What to do now:
Get proactive in communicating with your employer about the status and performance of your plan.
We advise our clients to not only conduct a review of their existing 401(k) plan, but also to have an independent consultant conduct a thorough plan review to ensure everything is on track.
It is a sobering fact that as many as 60-70% of the plans that come to us for the first time include poor performing or underperforming investments.