401k plans – route to a rosy retirement?

Is your 401k plan a route to a rosy retirement?

Moore for Your Money – By Byron Moore

Q: I’ve been at my new job for enough time that I can now participate in my company’s 401k plan. I’ve heard mixed messages about these things. But if I don’t do a 401k plan, what else is there to prepare for retirement one day?

A:When you decide to build a new house, what’s the first thing you should do – go hammer shopping?

401k plan

Byron Moore, CFP®

A 401k plan is a tool. Like most things in life, you need to make sure you understand what the capacities and limitations of the tool are. And many people, even you, may find the 401k to be a useful tool.

My youngest son is in his fourth year of a five year architecture degree program. He’s had the building bug his whole life. He used to collect scrap wood and nails, find a hammer and just start wailing away at it.

“Whatcha building buddy?” I’d ask.

“I dunno! I’ll let you know when I’m finished!” he would smile at me, content with his whacking.

Those days are behind him now. He still enjoys building things, but most of his time is spent on designing them. What I know about architecture would fit into a very small toolbox, but before the design even begins, an architect asks a lot of questions about the purpose of the structure being built and the desires of its owners.

First comes the design phase – the plan.

Next comes the skill phase, in which the plan is implemented. Allow me to oversimplify by identifying this as the stage in which you employ the right craftsmen to build the plan.

Only then comes the tool phase, in which the craftsman, guided by the plan, selects the tools and materials necessary to build the structure called for in the plan.

The same is true with your retirement efforts.

First, there’s a design phase, in which you design a plan for building your “retirement house.”

Second, there’s a skill phase. Here you must first decide whether this is a do-it-yourself project or whether you’ll find and hire qualified and trusted “craftsmen” (aka, financial professionals) to help you build the retirement house you’ve designed.

Phases one and two may be accomplished by the same person. In other words, the same financial professional may both help you design and implement your plan.

But be very, very careful here. It’s all too easy for a financial professional to give the design phase the short shrift so he can get to the building phase (where he makes his money). Be sure and ask direct questions before you decide on whom to hire.

Once you’ve got a design and you’ve settled on the appropriate, trusted advisor(s), then you can select what tools to use.

401ks can be useful tools, but they’ve got limitations. They work pretty well to help you accumulate assets to deploy for your retirement. But once you begin approaching retirement, their weaknesses begin to show up. Fund selections can be too limited for someone nearing retirement and distribution options (taking money out during retirement) can also be limited.

The main thing to keep in mind is that a 401k plan is not a retirement plan – it is a retirement tool to be used judiciously as called for in the retirement plan you (and your advisor) design – first.

Byron R. Moore, CFP® is Managing Director / Planning Group of Argent Advisors, Inc. Mike Jones is Managing Director / Investment Group of Argent Advisors, Inc. Write to either at 500 East Reynolds Drive, Ruston, LA 71270 or call (318) 251-5800. This newsletter is available via email on a free subscription basis. You can subscribe by clicking here. Direct any questions, comments or suggestions to Byron Moore at bmoore@argentadvisors.com or to Mike Jones at mjones@argentadvisors.com.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Argent Advisors, Inc.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.

Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. The opinions of any single advisor do not necessarily reflect the opinions of Argent Advisors, Inc. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Argent Advisors, Inc.. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

Argent Advisors, Inc. is a registered investment adviser registered with the Securities and Exchange Commission. Argent Advisors, Inc. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. Argent Advisors, Inc does not offer tax, legal or insurance advice. If you are a Argent Advisors, Inc. client, please remember to contact Argent Advisors, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Argent Advisors, Inc.’s current written disclosure statement discussing our advisory services and fees is available upon request.


Argent Financial Group

Celebrating its 30th anniversary in 2020, Argent Financial Group (Argent) is a leading, independent, fiduciary wealth management firm. Responsible for more than $30 billion in client assets, Argent provides individuals, families, businesses and institutions with a broad range of wealth management services, including trust and estate administration, investment management, ESOPs, retirement plan consulting, funeral and cemetery trusts, charitable organization administration, oil and gas (mineral) management and other unique financial services. Headquartered in Ruston, Louisiana, Argent was formed in 1990 and traces its roots back to 1930.

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