Think the Health Care Benefits Are Tough? Wait Until You See the 401k Investment Options!

December 20, 2016

What is it about 401k investment options that make your eyes glaze over? Basically, making investment decisions without any advise is a non-starter for most employees ~ even at the highest executive levels. A recent Charles Schwab study found that more than sixty percent of plan participants said their health care benefits are easier to understand.

Most employees, through no fault of their own, lack the time and talent sufficient to choose from the investment options offered in their 401k plan. The frustration seems to arise from the lack of advice they would really like from their employers. Yet, advice is the one thing that employers cannot give. You see, giving advice would expose them to Fiduciary Liability. It is a legal term which means employees could hold them legally responsible for the advice.

The challenge for companies thus became educating employees. Toward that end, you will have seen many more online tools: questionnaires, calculators, web seminars and perhaps third-party research. Some companies have even instituted in-house workshops. Yet with all this effort, no great number of participants actually took action to make investment selections. As a result, many plans have been amended to force employees into Target Date Funds from the start. The only way out of them is to make another choice.

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