Oops! Something went wrong while submitting the form
Oops! Something went wrong while submitting the form
When compared to balanced funds and target date funds, managed accounts provide greater customization for 401(K) investing. Although target date funds are the most commonly used default today, you may lack a thorough understanding of them. Research says that most participants don’t understand them. The level of equity exposure and risk can vary greatly among target date funds.
If you’re like the majority of Americans in 401(k) plans, you have been defaulted into a target date retirement mutual fund. These funds only take in one data point, your age. It also assumes that you will retire at 65. You are far more complicated than that. Have you been saving since you were 21? How much have you saved? Those are just a couple of factors that nullify the target date’s appropriateness for you.
Odds are that you have been defaulted into a target date fund through your workplace retirement plan. This selection is not based on a specific retirement outcome but rather on your age. Envision believes in completing a personalized retirement plan that considers various factors, including your savings, company matching, existing savings, marital status, and Social Security expectations. This holistic approach helps determine the appropriate amount of risk and savings needed to generate a comfortable retirement for you. That’s why we created (k)vesting®.
Using our technology partner, Pontera, we can access the investment options available in your company retirement plan.
Ideally, you have choices that include various asset classes such as large-cap, mid-cap, small-cap, intermediate bond, international bond, and others. Based on these choices, we develop a customized portfolio for you, considering retirement planning factors.
Depending on the number of investment options you have, we may use one of five different investment strategies, referred to as investment recipes, to create your customized portfolio. Our portfolio recommendations are based not solely on your risk tolerance but more importantly on your need for taking risks in search of returns and your time horizon. Once we have categorized your asset classes, we determine the investment strategy aligned with your risk tolerance or, better yet, risk need.
After developing your custom portfolio, we provide a Morningstar Hypothetical for you to compare our portfolio with the benchmark we have set.
Are you ready to get on the path to a personalized approach for your 401(k) retirement investing?