On the surface, investing in your 401(k) plan seems straightforward. But once you look more closely at your company’s 401(k) plan and consider all the variables involved, the decision becomes more complex. Investment options, employer contribution, vesting schedule and fees all vary from plan to plan and company to company. Deciding how much to invest and how to allocate the funds requires a close evaluation of your individual goals and the options available to you. At Wickham Financial & Insurance Services, our approach to financial counseling ensures that you make educated investment decisions to maximize the benefits of your 401(k) plan.
Our priority is always to listen to you first. Graham Wickham, president and CEO, discusses Wickham Financial Group’s core philosophy below:
Seek to understand and then to be understood is our guiding principle. First, we listen to get to know you and to understand what you’re facing in your financial life. Only then can we begin to guide you to your financial goals.
The next step is educating you on how to understand your own financial position. In terms of retirement planning and 401(k) investing, we begin by explaining three key factors: risk tolerance, age and goals.
- Risk Tolerance – Your risk tolerance is your sensitivity to risks and how much risk you can stand to take on when investing. If your risk tolerance is on the low end, you will probably want to take a more conservative approach to investing. If your risk tolerance is higher, you may benefit from an aggressive investment strategy. If you fall somewhere in the middle, a moderate level of risk may be suitable for you. Our team will teach you how to assess your level of risk and how to apply your risk tolerance to your 401(k) strategy.
- Age – The general wisdom is that younger investors can tolerate higher risk and invest more aggressively. In theory, younger investors have time to recover from any financial setbacks. This assumption often leads to younger people choosing more risky funds early on and gradually shifting towards safe havens as retirement approaches. However, your age is only one variable in the investment strategy equation. Your level of income, how much debt you carry, family dynamics and the investment options available in your 401(k) plan also factor into your approach. We can show you how your age is linked to your ideal investment strategy but it is not the defining factor in your decisions.
- Goals – Saving for retirement is one of many financial goals. Getting out of credit card debt, paying off student loans, establishing an emergency fund and saving for a down payment on a home are all financial goals you may want to include in your financial plan. It’s important to develop your 401(k) strategy in conjunction with your other financial objectives. Choosing some of the more standard 401(k) options like target-date funds, balanced funds, or model portfolios may seem like the easiest way to manage your retirement investments, but this may not actually help you reach your individual financial goals. We will walk you through all of your options to help you make informed decisions.
Ultimately, our goal is to get to know you and offer you solutions customized to fit your unique situation. This includes assisting you with setting reasonable expectations and determining the best strategy to maximize the benefits of your 401(k) plan. In addition, we provide continuous service to our clients. If your job changes or if you need to make modifications due to your financial situation we are available to guide you. We look forward to building a long-term relationship with you and helping you every step of the way along your financial journey.