Submitted and written by Paul Fokken
Does it “PAY” To Get Help”?
I think about my own life and ask myself is it better for me today to have someone mow my lawn and pay them for it? In my situation the answer is, my son is on his own, I’ve had major surgeries on my left leg and right foot so the answer for me is yes. How about home renovation? My wife and I always say we are good demolition or tear down artists but not construction connoisseurs 😊 so for some of you ask that question, does it makes sense to have this managed for me so I can do other things in my life and not worry as much about it.
Simply, it boils down to do you have the time and knowledge to research your 401(k) options and know when to make changes and more importantly, what kind of changes to make? Or could you have better use of that time for something else like spending time with the wife, significant other, your kids, friends, or family member/s?
Research shows in a couple of studies that if you have your retirement professionally managed you are likely to see an average of 3% more in your account annually net of fees! In a 2019 study titled Advisor’s Alpha, The Vanguard Fund Group, Inc., reported a 3% average increase in the value of portfolios of clients who work with a good financial advisor.¹ Morningstar’s David Blanchet, Head of Retirement, CFP, CFA, published a 2014 study titled, The Impact of Expert Guidance on Participant Savings and Investment Behaviors.The report revealed that participants who received expert guidance had as much as 40% more income during retirement versus those who received no help at all.² If you don’t think you have enough saved to warrant seeking third-party expert advice, or you think it won’t make much difference, take a moment to ponder this: Put it this way, if you give someone $1 and you get $3 or $4 dollars back, how many times would you do that? The answer for me would be every single time!
“On average, the median annual returns for participants in the study who got Help were more than 3% (332 basis points, net of fees) higher than people who didn’t get Help.” *
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2 The Impact of Expert Guidance on Participant Savings and Investment Behaviors. David Blanchett, Morningstar Investment Management Group, 2014.