Keystone Financial Group

David R. Guttery
RFC, RFS, CAM

Brandon Guttery
Financial Advisor

Office: (205) 655-7526
Office Toll-Free: (800) 894-0065
Contact: Send an Email

How to Take Advantage of This Great Retirement Income Tool

Someday we will all retire, or at least slowdown. How prepared will you be for that day? Retirement planning in the form of a 401(k) plan is an important part of your retirement income matrix. First of all, it’s never too late to begin saving for retirement, and no amount is too small. An important second step is to contact your plan administrator and determine if, or to what extent, your contributions will be matched. Why? Employer contributions or matches are free money that you shouldn’t leave on the table. Finally, I would suggest to anyone that you shouldn’t neglect retirement while focusing on other objectives and expenses. Build it into your budget and your financial plan. It will be deducted on a pre-tax basis and before you ever see it, so the “out of sight, out of mind” principle will help in this process.

I often find that people under-participate in qualified plans because they do not understand their features and benefits. The bottom line is that they create retirement income, but there are many ways to reach those goals. I am a Section 3(21) qualified plan fiduciary, which means I not only work with companies in the creation of qualified plans, but I also work with sponsors of existing plans and their employees to help educate them about the benefits of those plans and how they work. The Department of Labor offers many publications about the fiduciary responsibilities of a plan sponsor, and I often work with companies to help them meet those obligations to their employees. I recommend you ask your employer if there is already an educational partnership you can take advantage of. If not, you should contact a 3(21) financial specialist to assist you in the enrollment and investing process.

Top Ideas to Evaluate in a 401(k) Plan 

As you consider participating in a 401(k) plan, I suggest that you evaluate several aspects of it.

In particular, pay attention to fees.

Fee disclosures are required to be provided to participants, and over time, the internal expenses of funds and plan costs could be significant.

I would also research the plan to determine the rates of matching, the frequency of communication, how to access your retirement dashboard, tools for retirement planning calculations, and whether or not options exist for a self-directed portfolio. Some qualified plans offer a Roth account that can have major tax advantages, as well as the option to directly transfer balances from the plans of previous employers – that way, you only need to manage one 401(k) plan.

While I don’t recommend taking loans from your retirement plan because of the penalties and lost retirement growth opportunities, it would also be a good idea to understand the limitations that would apply if you do decide to follow that path.

Qualified plans aren’t cast from the same mold, and yes, there are some good and not-so-good plans out there. At a high level, though, a 401(k) or another similar plan can be a fantastic tool for generating retirement income. If you haven’t started yet, it’s not too late.

Don’t leave an employer’s match on the table. Just start. Build your retirement plan contributions into your budget and work with a professional to help design a portfolio that will last long into the future. When you are ready for help with financial planning in Alabama, please contact me.

David Guttery and Brandon Guttery offer products and services using the following business names:  Keystone Financial Group – insurance and financial services | Ameritas Investment Company, LLC (AIC),  Member FINRA/SIPC – securities and investments | Ameritas Advisory Services (AAS) – investment advisory services. AIC and AAS are not affiliated with Keystone Financial Group. Information provided is gathered from sources believed to be reliable; however, we cannot guarantee their accuracy. This information should not be interpreted as a recommendation to buy or sell any security. Past performance is not an indicator of future results.