There are various reasons why we save for our retirement. The most common reason is that our earning is supposed to cease at some point as we age. It is the fear of the unknown that makes us save for the future. However, it is very important that we know where and how we are saving for our retirement. There are various third parties who help with retirement accounts. To have a perfect peaceful retirement plan, it is very essential that you determine whom you can trust with your retirement accounts.
The below finding is from The Employment Benefit Research Institute (EBRI) 2017’s Retirement Confidence Survey:
EBRI found that the vast majority of respondents chose a retirement plan provider (67%) or an independent financial services company (64%) for retirement. However, there was no clear winner in the survey as trust is a factor which is not very easily developed. There have been ample examples where retirement plan companies have not acted in the best interest of their clients. An independent financial services company might be your best bet; however, they might be as novice as anybody else given that no one is perfect predicting the growth of your investments. A relative, friend, or a coworker might be interested in helping you, but they too could be drastically wrong in suggesting something against your risk-taking abilities and requirements due to their limited knowledge about your retirement preferences.
If your source of retirement advice and implementation is someone other than you, please note the below fiduciary responsibilities outlined by the Department of Labor:
- Plan providers should act solely in the interest of plan participants and their beneficiary.
- Carry out duties prudently.
- Adhere to plan documents outlined by Employee Retirement Income Security Act (ERISA).
- Diversify plan investments to minimize risk and maximize reward.
- Pay only reasonable plan expenses.
However, the retirement confidence survey missed the most important caretaker of your retirement: YOU! Who would think better about your retirement other that you, yourself? Only you are the best judge of your risk-taking capabilities, investments and financial goals. However, when you take the responsibility of your own retirement account, it gets extremely important to educate yourself on investment concepts and to keep abreast with the latest developments. So, start investing in your future by fueling the sea of knowledge!