We see so many tech professionals with a “set it and forget it” mentality when it comes to retirement investments, but is that a good thing? We don’t consider that a smart strategy. If you don’t regularly revisit your strategy, you could be exposing yourself to greater risk, you could miss out on participating in market opportunities, which can impact the outcome of achieving your long-term financial goals.
We recommend tech professionals review their 401(k) and retirement investment allocations every six months, and make changes based on goals and time horizon, the status of the markets, and other variables based on their overall financial planning and investment strategies.
What to consider
Here are some questions for you to consider for your next retirement investment reallocation:
- Do you have a tactical approach to your reallocation strategy, or did you just pick a target fund?
- Similarly, how did your reallocation position you if there is a major market shift? Do you have a plan for this?
Let’s look at an example
A 23-year-old tech professional begins her professional career and puts 100% equities in the company 401(k) plan. Fifteen years later, and likely multiple 401(k) plans later, no tactical changes have been made.
Believe it or not, we see this all the time. How many opportunities were missed? How exposed were their investments particularly during huge market downturns? Every person’s situation is unique and deserves attention based on what is happening around them and in their own lives.
Set a calendar alert for every six months, so you remember to review your retirement portfolio and make any necessary adjustments. If you are not fully confident with how your 401(k) should be allocated, we recommend considering reaching out to an advisor. Giving your retirement portfolio professional oversight allows for nimble and tactical updates, taking into account your overall long-term strategy.
Important note: MA Private Wealth advisors advise on 401(k) and retirement allocations as part of the service that they provide to clients, but this is rare in the industry. If you do decide to partner with an advisor, make sure you ask about this in the discovery process!
Are you a tech professional? Take our quiz to find out if now is the time to start working with a financial advisor.