Saving for retirement is a goal for many investors, whether using exchange traded funds (ETFs), stocks, mutual funds or bonds.  Many companies offer 401(k) plans, where employees can make contributions as well as participate in employer match.  Watching these funds grow is important because it means more for you when you retire.

Many 401(k) plans offer investors online access or over-the-phone chats to discuss there investment options.  It appears that those who don’t take advantage of this feature, end up with less money in their portfolios. Tim Paradis for Associated Press reports that from a Charles Schwab examination of the 401(k) plans it oversees, they found that investors who seek some professional advice for investment decisions enjoy greater returns than those who go it alone.

The difference between a few percentage points here and there may not seem like a lot, but compounded over decades, it can be quite a sum of money.  Asking simple questions such as putting 10% here or there can make a big difference, especially for the younger plan participants who have a longer time horizon.  Despite all the educational tools available, investors just don’t seek advice unless it is imperative.  As Schwab’s Jim McCool puts it, at the end of the day, investing is an emotional decision and people need help.

While seeking advice in your 401(k) may help, it is also important to know and understand your investment options.  The bulk of the 401(k) industry is still dominated by mutual funds, but ETFs are making their way into these plans.  Maybe while calling the 401(k) plans with investment questions, ask why they are not offering ETFs.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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