events have caused people to turn their backs on many of the things
they once loved.  Whether it’s from a revealing crash of an incident, a
health conscious decision, or a movement of market and times, trends
come and go.  With every new report comes a change in the tastes of the
people.   But one of these things is not like the other ones.  Unlike
many of the fads, the 401(k) may not be something to be written off as a
thing of the past, and you should think twice before making it a thing
your past.

recent years the 401(k) has taken a few knocks.  To some people the
401(k) is the ugly step sister of the pension plan, giving employers an
easy way out of having to directly provide for the retirement of their
employees.  Also, one of the greatest assets of the 401(k), the company
match programs, has become another casualty for many companies in this
recessive war we continue to fight.  In addition to that, many employees
find themselves with a lack of flexibility in their plans in the slate
of investment options chosen by the employers.  These options are often
selected based on how the employers can best reduce their costs,
resulting in high fees for their employees.

Furthermore, the 401(k) can
easily become the old ball and chain, tethering an individual to a
particular company in order to keep their plan in motion and avoid the
hassle of a transfer.  Some companies even require employees to stay
with them for a certain number of years or they risk losing the
company’s match contributions.

all those cons, you might find yourself thinking that a scandal of
multiple affairs or an early heart attack don’t seem all that bad.  But
it’s important to focus on the advantages of the 401(k) that are
unparalleled by most retirement plans.

  • Take
    advantage of the perks inside your 401(k).  Most of the time your funds
    are a healthy mix of actively managed funds with high fees and index
    funds that offer lower costs.  Those high fees could amass to hundreds
    of thousands of dollars by the time you retire.  The low cost
    alternatives can offer you a better long term option.
  • Switching
    jobs can be an opportunity, not a struggle.  The money in your current
    401(k) can easily be rolled over into an IRA giving you some
    independence and control over your funds.  This can save you money in
    fees with the ability to choose from a wider variety of investments.
    Also, some companies allow you to transfer your current 401(k) into
    their existing program.  There are plenty of options for you if you are
    looking to escape your current job, but don’t want all your hard
    investing work going down the tube.
  • Find
    a window to leave. If you are looking to switch jobs, look into the
    rules regarding the company’s match program and the term requirements of
    how long you have to continue with them to avoid losing their
    contributions.  If its five more years, it might be worth it to just cut
    and run, but if you are just a few months shy, you might want to stick
    it out.  Either way, it’s better to know where you’re at on the board
    than to hope and pray you’ve passed Go and can collect the $200.

relationship with your 401(k) is like a marriage.  It has its tough
times, but if you focus on the good parts, and put some work into making
it a cohesive partnership, you can find yourself living happily ever
after, possibly in a retirement home in Orlando.  The bottom line is
this: falling into a fad or trend can oftentimes lead to disappointment
(we all remember the sad day when floral print satin shirts became a
fashion faux pas) but make sure you put some thought into your future
before you turn your back on your 401(k).

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