401k Contributions

Almost all the decisions made about the retirement plan are driven by employee wants and needs. When creating or changing the plan, it’s important to think about investing habits, aversion to risk, and goals for the future. Should you give similar attention to the wants and needs of your former employees? Under most defined contribution plans, former employees are permitted to keep assets in company plans even after they have left the company.  If your plan has low or reduced fees and a wide range of investment options, you may be inadvertently incentivizing former employees to stick around. Is it a good strategy to keep inactive participants in your plan? Will managing their assets help or hurt you in the long run?

Life is full of surprises that often are greeted with a smile and make people feel excitement and exhilaration. Surprise parties, an end-of-year bonus or a thoughtful gift can elicit this reaction. However, there are also unwelcome surprises that are approached with anxiety, frustration, and stress about how to manage through them. Examples include a medical issue, unexpected educational or other expense or even a transitional life event such as buying a home.