2nd Demonstrate a little care for YOUR MONEY
Many people say “ I almost never look at my 401(k) statements or go online.
The excuses include foolish comments like, “ I don’t want to look because I get nervous if the market drops”, or “ I can’t take the money out till I am 59-1/2 years old, so why should I look?”
For starters, let me ask you to demonstrate a little care for YOUR MONEY.
Do you not look at your bank statements to make sure that the boss deposited this week’s paycheck?
When your employer direct deposits your paycheck, he usually should deposit your 401(k) withholdings into your account within the next 3 to 4 days. Otherwise, he could be penalized by the United States Department of Labor (DOL) for making untimely deposits.
By looking online, you will be doing yourself and fellow employees, and maybe your employer, a favor by monitoring the timely deposit of your money. Information on the DOL ‘s website discloses cases of employers who held the employee money and used it to pay bills, even though this is illegal.
Sometimes it was not the business owner who did this, but rather an unscrupulous bookkeeper who was trying to steal money without being seen.
By looking at your statement, and talking with fellow employees, you are actually auditing the 401(k) plan by monitoring the timeliness of deposits.
My third and final point deals with being an investment guru.
It is really not that hard, if you follow two simple rules.
There is information online for most funds about the return they have made over history, and what the funds charge as an expense. You can compare each fund’s results on returns and expenses to something called the “industry average” or “benchmark” by looking at the fund data on a website offered by Morningstar.
There are a number of other tools available, if you really want to become knowledgeable, but the Morningstar benchmarks are reliable and easily obtained. If you want to be a hero to your boss and your fellow employees, be bold and offer to serve on the investment committee.
Most small companies do not have a formal investment committee, even though they should. So, if your employer has no investment committee, ask to set one up.
Become your own 401k plan auditor! Go make your money work for you.