The Novus Advisors team sheds light on a startling problem—and easy solution.
When you’re focused on big career moves, corralling your previous 401(k) probably isn’t on your priority list. And you’re not alone: Americans have over a trillion dollars languishing in forgotten plans. That’s a fortune in investing potential being lost from sheer lack of attention — and an easy problem to solve with the right team on your side.
“The sooner you take control of old assetslike this, the better off you’ll be in the long run, and the sooner you could meet your goals for retirement,” insists Chris Connelly, principal at Novus Advisors. So, as a culture of intelligent business people, how did we get here? “In an effort to increase participation in 401(k) retirement plans, a lot of employers introduced target date-type portfolios,” says Connelly. “You’d just look at your age, figure out when you’re going to retire and match that up with a retirement fund within your plan. It’s very hands-off.”
This led to a “set it and forget it” mentality. “Once people picked their percentage and plan, they never really looked at it again. Once upon a time, when people worked for the same company for 30 years and retired, that made sense — but people don’t work for the same company for three decades anymore.”
Given this current trend, chances are good there’s a retirement plan you’ve left behind. And because you haven’t been actively monitoring it, your investment isn’t working as hard for you as it could be, if you can even still access the old plan. “Maybe time has passed, and your previous employer has changed providers, and you can’t log into your old account anymore,” reveals Connelly, “or your life might look different now: there may be the wrong beneficiary assigned, the addresses are outdated, or your maiden name is still listed.”
“The vast majority of 401(k) participants do not have an active advisor that they regularly review their accounts with,” adds Jennifer Belshe, principal. “It’s surprising how many people have not one, but multiple retirement accounts just sitting there, not being managed or maximized. And without an advisor, they’ve never had anyone suggest to them that these existing accounts could be combined to work together, or to reduce fees, or to reevaluate their investments.”
Your investment decisions should be in your hands, not in the hands of your former employer, says Connelly. “Move it to an IRA that you control, where the decisions being made are in your best interest, not the best interests of your former company.”
If this sounds like a hassle, the Novus team wants you to know that the answer is simpler than you think: form a relationship with an easy-to-talk-to, experienced local advisor who can demystify your options, streamline next steps and proactively manage plan performance for you.
“We deal with clients that have multimillion portfolios and some with only $15,000 in an IRA,” Connelly says. “But at the end of the day, how you manage all of these assets plays into the ultimate goal of maintaining a certain lifestyle after you hit retirement age. You want to make the most out of what you have, and we help you do that.”
