Towards retirement
I have finally decided what to do about my 401(k). It hasn’t been easy, as the concept is new to me and the current economic climate really makes a mockery of any decision making process.
In my working history in the UK I’ve been on final salary pension plans. I contribute maybe a little, the company pays the bulk of it. The final pension is based on a percentage of my salary when I retire or leave, the size of the percentage being based on length of service. Simple to understand and non-volatile. I think that lot is fairly safe, even in the current economic climate - the value doesn’t fall. 
The fund may, in some way, get wiped out entirely, but my pension is secure. Or as secure as anything financial is at the moment.
Which is the dilemma facing the average American. When nothing is safe, what to do? I figure the real fact of the matter is that you have to look at a 401(k) as a risk. But what’s the alternative to risk? There are several, but none are going to provide the level of return that people probably need for their retirement.
So what have I decided? To take the risk. Quite simply, to start a 401(k) and to try and beat the savings account percentages. The only way to do that and reduce risk is to stay alert, stay aware, and get educated. Not to just pay up every month and cross my fingers, but to actively monitor and check up on the funds in which I invest. Yes, that’s going to be an effort, but it is my money, and we’ve all seen recently what can happen to your money if you blindly rely on someone else. So, it is every man, woman and young wage earner for themselves, I’m afraid.
Maybe this is the perfect time to buy in, when everything is at a low point. trouble is, everything seems to hit a low point and then carry on downwards.
Oh what interesting times we live in…
Tags: 401k, final salary schemes, retirement, uncertainty