401k Utilization

Many participants in workplace retirement plans are automatically invested in qualified default investment accounts (QDIAs) upon enrolling in the plan. All too frequently, these participants remain in these investment products for years, which can be harmful to their long-term retirement savings potential.

Why? Because QDIAs are generic investment strategies that are not customized to meet a particular investor’s needs. They are often overly diversified across thousands of individual equities and bonds using outdated allocation models from the 1980s and 1990s. An analysis of these investment products shows that they consistently underperform their benchmark index. In addition, they are almost always overly exposed to risk because their models don’t change with market cycles.

The bottom line? Remaining invested in these products throughout your career could end up costing you hundreds of thousands of dollars in missed opportunities and added risk.

At Workplace Financial Advisors, we’re on a mission to improve retirement plan participants’ investment performance.

We work with you to construct and maintain a 401(k) investment allocation that includes a concentrated mix of investments based on your time horizon, risk tolerance and future goals. We take a holistic approach to help ensure your retirement plan allocation complements any outside investments as an overall portfolio strategy.

As we develop your custom 401(k) investment allocation, we strive to strike a balance between maximizing returns and minimizing downside risk. As your career progresses and your goals evolve, we make any necessary adjustments to help ensure your allocation continues to meet your needs. Our goal is to avoid missing out on returns by investing too conservatively at the start of your career, while also avoiding unrecoverable losses later in your career.