There so many people who have 401(k) or an IRA with little idea about where there money is actually going or located. When you ask them where’s your money They simply look at you and say at the bank Or with my broker. It’s no wonder theirs why there’s so many people who are unprepared for retirement when the time arrives
All to often everyone assumes there financially prepared because your broker is controlling your retirement money and then when the time comes actually to retire. You go and ask about your money to find out that you don’t have anywhere near the amounts you thought you had. This is serious problem that happens every day to so many unsuspecting people who want to retire. So let’s clear up some of these myths once and for all.
You have to risk your hard-earned money to have a chance to get decent return A lot of 401(k)s and IRAs are invested into the stock markets, which is a major concern that we should all have. The stock market is such a dangerous place to have your retirement money. People used to think that when they allow there brokers to do stocks, you get a 10% return on your money annually. But now those numbers have staggered down and is more like 5% back annually.
The truth There isn’t any reason to put your money in any type of risk. When you can make money using safer investments such as fixed index annuities. They are basically a savings account, but through your insurance company there safe they have liquidity and generally have better rates then most products. Did you know that during the Great Depression. Nobody who invested in index annuity lost any of their money. This is what I consider one of the safest investments that you can possibly make. The question is how come your broker hadn’t told you about this type of investment.
Another myth you broker makes money when you do Most people think that their brokers have the best in mind for them, but they actually don’t, because the brokers will always make money from fees(your paying).They take your money and invest in the stock market by buying shares of stocks and mutual funds. The problem with stock markets is that there’s three things that can happen to the market it can go down, Up, or stay flat. Whatever happens your broker will Still be making money he gets paid from fees along with commission on anything he buys or sell’s for you.
This only affects the client, which is you this is why you broker doesn’t invest in things like annuities, because he doesn’t really have your best intention in mind. Broker who invest in that only get a one get paid a one time fee so why would he invest in that? The broker will choose the more risky way because he gets paid more and safe investments are too boring for them. Now after you read this rethink your broker’s intention who’s he really looking out for?
Maintaining your portfolio isn’t very expensive you can constantly keep putting money in your account, but there is a hidden fees at first these fees might seem tiny. But they are slowly draining out from your retirement funds, which can drastically affect you in the future. You might think that they’re not such a big deal at this very moment but what about the future they add up to large amounts you’ll be surprised.
Here’s a few things to ask your broker about
-ask about your administration fees
-Ask about your investment fees
-And also ask about your individual service fees
By doing this and taken action to avoid these or lower these fees you can add thousands of dollars to your retirement savings. This is important if you plan to retire today or another 30 to 40 years you have to have control over your accounts right away you must understand how your broker is investing your money and whats his intentions for you if you plan on having a very nice and relaxed life after you finally decide to retire.