Importance of Investment Choices with 401K Plans

Why should I look for DIY 401K suites that offer a number of investment options? Aren’t these too expensive for a small business like mine? Glenn Johnson, runs a home foods business in Kentucky.

The primary objective of offering a 401K plan to your employees is to encourage them to start saving for their future. Any business, however small, is bound to have employees of various ages, in different stages of life. Older employees, who are near retirement, will typically prefer to invest their 401K contributions in risk free, safe avenues. Younger ones will be more open to higher risk investments. Although the 401K is a nest egg for retired years, the degree of risk that participants will be willing to undertake with respect to deploying the funds in this account may differ substantially.

Choosing a DIY 401K package that offers very limited investment choices is a sure fire way to make your employees quickly lose interest in contributing to it because it simply doesn’t; match their investment attitudes. Opt for suites like that offer top notch investment avenues from Vanguard, Fidelity and many others to encourage your employees to maintain contributions voluntarily. Because of the comprehensive range of investment choices offered by such 401K suites, each and very employee of yours is sure to find a product that matches his risk appetite, investment horizon and returns expectation.

Many of these effective and flexible DIY 401K software suites let you keep costs well within your budget. The fact that you can administer it yourself with minimum time investment lets you eliminate administration fees that you would otherwise be paying to a third party.

About Elliot Earl, Director, Pension Trade Association
Director, Pension Trade Association Founded in 1982, the Pension Trade Association [California Domestic Nonprofit Corporation #C1629080] is dedicated to helping workers save for their retirement through expanded coverage of 401k -type defined contribution pension plans.

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