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Retirement Planning Strategies
Use these strategies to get the most out of your retirement.


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Your retirement isn't something you should ignore. Now's the time to act.


Is that hissing sound your 401(k) account losing precious dollars from the recent stock market swoon? Years ago, when your balance was small and fluctuated in value, it never bothered you, because even large swings represented little in actual dollars. However, your balance has grown over the years as you and perhaps your employer have made annual contributions, which have benefited from several periods of considerable stock market appreciation. Now, a 15 percent decline is real money and you are not getting any younger. In fact, for many 401(k) participants the U.S. stock market correction that started in late October 2007 has wiped out the past 18 months of profits and possibly some of their contributions.

In years of strong growth, a poor asset allocation may result in earning less than your potential. However, during market corrections or bear markets (stock market decline of over 20 percent) a poorly allocated portfolio can sometimes represent huge losses like those experienced during the last correction that started in March 2000. This is a great time for you and your spouse to evaluate how your retirement plan(s) are performing. You can achieve consistent realistic annual returns without staying up nights studying charts by following these three strategies.

The first strategy is making the process of managing your retirement accounts a team effort with your spouse. Working together and making decisions about which mutual funds to select (most retirement plans offer mutual funds as investment options) empowers both of you in the process and takes the burden off of one spouse having all the responsibility. If anything happened to one of you then the other would be prepared to handle the account’s investments and/or distributions—with a power of attorney.

The second strategy is to implement this quarterly review process of your account shortly after receiving your retirement statement:

* If you are still five years or more away from retirement, compare the return of your retirement account to the S&P 500 Index, which is usually reported on the statement. If the account earned less than this index, you may have too much allocation to money market and/or bond funds.

* Look at the mutual funds that represent your three largest balances. Are any of these mutual funds among the top three best performing mutual funds for the past quarter? A great quarter is having your top three largest holdings in the top three best-performing mutual funds. However, if you have only one or none of your top holdings in the past quarter’s best performing mutual fund then it is time to evaluate if you should make some changes with your account balances; this would also be a good time to call a financial advisor.

* Whether or not you plan on rebalancing some of your retirement account into the past quarter’s best-performing mutual funds, you should consider allocating some of your future contributions into these better-performing funds. Your payroll contributions represent a smaller portion of your account and can be invested more aggressively without putting the overall account at risk. Secondly, it is not unusual for categories to perform well over several quarters in a row until economic events change investing environments. If you are reviewing the performance of all available funds in your retirement account each quarter you will notice when a particular fund begins to under perform. This could be a sign you may want to reduce your balances and/or future contributions into this fund.

The third strategy is to solicit help with your task of managing this account. The investing world is getting more complex every year and, thanks to more and more government regulations on retirement plans, more challenging to understand. Many company sponsored 401(K) retirement plans have financial advisors already available to assist you with your retirement account at no costs. Be sure to find out about their experience before depending on their advice. If you already have a financial advisor that is managing other accounts for you, ask them to provide assistance in reviewing your quarterly retirement account statements. They may do this at no cost or for a small fee. Your advisor should understand asset account modeling methodology to assist you in determining the percentage allocated to each mutual fund especially as changes occur in US and foreign economies.

Most likely you have already done the math on the future potential value of your retirement account. My experience is most people’s 401(k) retirement with even an average annual rate of return will represent their second highest valued asset at retirement after their home. If you manage your retirement account well, it can be a valuable asset for you and your spouse during your retirement years.

Anton Bayer, CFP has over 27 years experience as an investment advisor and financial planner. He currently co-manages over $350 million in assets for individual and retirement plan accounts as the Senior Vice President of the Northern California Wealth Management Division for CBIZ Financial Solutions, Inc., broker dealer, member FINRA. To begin receiving a complimentary copy of his newsletter, Managing to Retire, or to order Mr. Bayer’s book contact Anton Bayer at 408-794-3536 or via email at abayer@cbiz.com.


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Over 1 million couples turn to Hitched for expert marital advice every year. Sign up now for our newsletter & get exclusive weekly content that will entertain, educate and inspire your marriage.



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