Your 401(k): Why You Shouldn't Go It Alone

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• Basic instruction on different asset classes and why diversification among these classes is critical to avoid big portfolio losses when one asset class tanks. This means understanding the basics of asset allocation — deciding how much of your total portfolio to invest in stocks versus bonds versus other types of assets.

• The impact of fees. Plan providers are now required to disclose their fees and those of companies providing investments for the plan in quarterly account statements they send to employees, but these disclosures are still murky. Your employer is required to understand these fees, so HR people, or perhaps an advisor working for them, should be able to explain them. Fees are one of the most critical factors affecting investment returns. Remember: How much you're paying for your plan determines its value. If these fees are high relative to the market, your employer should negotiate them down or, failing that, change providers.

• The impact of inflation. By understanding the impact of inflation on your portfolio, you can make better investment choices to limit the damage. If you're buying 30-year bonds as inflation is rising, or is about to rise, you could be losing money on this investment for a long time.

• Why your basic investment goals should evolve as you age. The investment objectives and needs of individuals of the same age vary widely. But the basic investing principles that people need to master also vary with age because people of different ages have different time horizons for retirement. This is why employers who do the right thing by setting up plan education classes should make sure these classes are separated according to age. There should be separate classes for people in their 20s, 40s and 60s.

• Information that helps you understand the concept of risk tolerance, how it applies to you personally and how it affects your investment choices. If you're taking too much risk, you can't sleep at night. Or, if you're taking more risk than you're aware of, perhaps you're sleeping too soundly. If you don't have a low risk tolerance, you shouldn't have most of your money in bonds (which pose far lower risk than stocks) unless you're a couple years from retiring or already retired.

These and other important elements of 401(k) plan education should be part of a written company policy. When investment managers write down their guidelines for clients, they call this an investment policy statement (IPS). Employers should do the same regarding principles of employee education by creating an education policy statement (EPS).

By seeking more plan education and advice on your particular 401(k) account, you could help your employer develop a more effective benefits program at potentially no additional cost. This could make the company more competitive by enabling it to better attract, retain and motivate skilled employees. The key is to remember that you and your employer are in this together. There is nothing adversarial going on here because employees and management have the same interests. After all, the top executives of your company also participate in the plan.

Moreover, improving your plan's effectiveness by making sure that employees understand it can only improve workplace morale. People are happier if they know that they have a better shot at a dignified retirement.

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. Kippins serves as managing director of Institutional Fiduciary Assurance LLC, an organization that provides fiduciary advice to trustees of endowments, foundations, non-profit organizations and charitable trusts. He can be reached at rpa@retirementplanadvisorsltd.com.

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