Is It OK To Not Know What’s In Your 401k?

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How many people really know what’s in their 401(k)? Not many, according to CNBC, finding that many Americans are ‘clueless’ about their 401(k) investments.

Not surprised by these results. I would always ask prospective clients what they owned or what their allocation was in their 401(k) accounts. They usually said “I don’t know.”

Is it OK not to know? Not really. Sure, if your allocation is decent, and the plan contributions and investment options are good, it’s OK. But you don’t know until you look.

And some investors will never look or won’t understand what they are seeing without an advisor’s help.

It’s not unheard of to review a 401(k) account and find that (pick one) – the employee contribution is way too low, the account is entirely in short-term investments, the employee forgot to sign up (!), etc.

A nice sign of 401(k) investor engagement? When someone knows roughly what their allocation is and how that helps them meet their identified goal.  ❖

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