How Do You Explain 401K Retirement Plans?
Understanding your monthly 401(k) statement can be a real challenge if you’re not financially savvy. Mutual funds, contracts, sub-accounts, total returns…what does it all mean? Clear away some of the confusion by learning what you need to look for on your next statement. Look on your 401(k) statement for your current plan balance. This number will equal the sum total of all of the investment choices that you have made within the plan. You can compare this number to last month’s balance to get an idea of how you are doing, but don’t get too caught up in your plan’s month-to-month performance. Remember, you’re investing for the long term. Don’t let the plan’s investment choices confuse you. Although most 401(k) plans offer mutual funds as the primary investment choices, many plans offer them within a variable annuity contract, which is a stand-alone tax-deferred retirement vehicle that offers a preselected array of funds within the contract. Look for total contract value, and pay atten
