Lessons From a 401(k) Education

• Age-related considerations. The older you are, the more you're probably thinking — or should be thinking — about your retirement, but the less time you have to build up your nest egg. If you're 25 years old, your approach to investing for retirement is a lot different than it would be if you were 55. These younger investors can take more risk because they have more time for their portfolios to recover from losses.

• The importance of risk tolerance. Risk tolerance doesn't just vary with age; it also varies among individuals of the same age. This can be a tricky area. Some individuals are much less risk-averse regarding their investments than they initially believe. By talking to your plan advisor, you can get a better sense of your true risk tolerance. Then, you should apply this to your plan investment portfolio. If you find you're highly risk averse, perhaps you should sell some of your shares in that highly aggressive international small-cap fund you bought when you signed up with the plan. If your risk tolerance is truly moderate, perhaps the ultra-conservative portfolio you put together under the plan isn't aggressive enough.

• Information on what types of advisors serve the plan — if any. The new federal rules require employers to determine whether their plan advisors have potential conflicts, based on disclosures these advisors are now required to make. For example, plan education is often offered by brokers, yet brokers are expressly forbidden to make recommendations concerning the suitability of specific investments. So, at these companies, the broker that hosts your group seminar can't really advise you specifically on your portfolio in any depth. For that, you need a fiduciary advisor — one who, because of federal regulations and greater potential legal liability, must avoid all conflicts of interest.

• The critical issue of funding. No matter how well your plan investments perform, if you don't contribute enough to your plan within allowable limits you will likely come up short when it comes to having enough money to pay retirement expenses. There is a developing retirement crisis in America: Too few people are contributing enough to their plans — plans they're relying on exclusively to pay for their retirement. If you don't contribute enough, it doesn't matter how well you're managing your plan investments. The sad truth is that far too many people are contributing too little too late.

Does the education program at your company cover these items? If not, why not? This is a good question to ask your HR department.

Of course, these questions assume that you know what's going on regarding the 401(k) plan at your company. If you're ignoring those emails or have never visited the dedicated plan website or have failed to attend the bag-lunch seminars that your company routinely hosts, then maybe it's not your company that's behind — it's you.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Anthony Kippins is president of Retirement Plan Advisors, Ltd. a Registered Investment Advisory firm that addresses the needs of retirement plans and the employees who invest in them. An Accredited Investment Fiduciary Analyst (AIFA®) with more than 30 years of experience domestically and abroad, Kippins specializes in providing fiduciary advice to retirement plans on governance, investments and educational services. He also advises individual clients on retirement planning and investment management after retirement. He can be reached at rpa@retirementplanadvisorsltd.com. If you have a question for Kippins about 401(k) plans, please send email it and he will try to answer it in an upcoming column.

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