Flustered By Your 401(k) Plan?

Flustered By Your 401(k) Plan?

Not sure what to make of those retirement earnings statements that you get every month?

You're not alone. According to a new survey, workers find the explanation of their retirement plans more confusing than their company health care benefits—and their befuddlement is stressing them out. The report, which was conducted by investment firm Charles Schwab and polled over 1,000 401(k) participants, found that more than one-third of respondents felt anxiety about the best way to manage their investments.

Experts aren't surprised by the findings: "This is consistent with what we've been hearing from people," Steve Anderson, executive vice president of Schwab retirement plan services, told NBC News. "Trying to figure out how to take control of the plans can be overwhelming, especially for someone who doesn't have the time or knowledge."

What's more: Most of the respondents (89%) said they don't expect to receive government assistance in retirement, which means that knowing the ins and outs of your investments now is more important than ever.

Knowing Is Half the Battle

Nearly half of survey respondents said they feel clueless when it comes to how to allocate the funds in their 401(k) accounts. And 34% felt so clueless, in fact, that it caused them "a great deal of stress." With workers so confused and stressed out, it's no wonder that 57% of survey respondents said they wished there were an easier way to figure out the best investments for them.

"I think most Americans don't know how to allocate, or distribute their assets inside the 401(k)," Aron Gottesman, a professor of finance at Pace University, told NBC News. "Should they go into stocks or bonds, or both? And how much should it be? They're confused."

RELATED: How to Refocus Your Retirement With a Rollover

Learning To Read Between the Lines

More companies are providing financial advisers and other tools like portfolio models to help guide their employees through the 401(k) process. These portfolio models offer information on different available investment funds and their risk factor. Advisers make sure there are enough options to keep employees happy.

Of course, the bottom line for choosing the best 401(k) investments is the same as it is for most money-managing decisions: Do what's right for you—and your budget.

Don't know where to start? These basic retirement guidelines can point you in the right direction. Whether it's an IRA or 401(k), there is always a way for you to retire in style.


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