I am in my 30’s and am contributing to a 401(k) through my employer. Maybe I’m just paranoid, but I have a feeling in the next 30 years there is a decent chance of some sort of financial collapse. What types of protections are in place to help ensure that the hard earned money I am saving is still going to actually be there for me when I retire in another 3 decades or so?

  1. 11472 POINTS
    Larry GilmorePRO
    Agent Owner, Gilmore Insurance Services, Marysville, Washington State
    It's a good question brought about by being pounded with doom and gloom that seems to dominate the media. The chances of what you think happening are pretty limited as there is much oversight of financial products here in the United States. That said, you can contribute up to the matching limit and go elsewhere to invest money for the future. The big thing is the future is coming whether you invest or not. When it gets here, you'll have saved money or not. If you don't trust your employer's plan, and I am not saying that is crazy or wrong, do something else as an individual and get into the habit of saving. There are a huge amount of choices out there you can do. They all have different risks involved and tax consequences. Find what makes you comfortable enough that you will do it for the next 30 years. Cheers.
    Answered on July 24, 2015
  2. 21750 POINTS
    Jim WinklerPRO
    CEO/Owner, Winkler Financial Group, Houston, Texas
    That is a really good question! And trust me, you're not the only one asking it...There are really very few certainties in life, but we all seek to find as many as possible. Knowing that we have a safely protected retirement certainly ranks up near the top. While we can not guarantee that our retirement fund will last, there are some things that you can do to help ensure it:
    1.) Have a clear picture of what retirement means to you - does it mean travelling and dining out often? If so, your fund will need to be large enough to accommodate that. If it looks more like fishing and working part time, then perhaps your fund can be a little more modest, and still be fine. But if you do not know, "People without vision perish," as the Proverb goes.
    2.) Pay close attention to how your 401k is performing. If you don't know what it is doing, you are right to worry. While I do not recommend knee jerk reactions to losses, trends are worth paying attention to, especially if they are negative, precipitous, and lengthy.
    3.) Know your spending habits. Have a very good grip on your budget process, and where you can squeeze out a little more to invest. Having good habits and keeping debt low entering retirement helps with the life of your investment also.
    4.) Do not put all of your eggs in one basket, or as you more commonly hear, diversify. Start a Roth IRA to balance out your taxable 401k; Purchase an annuity or two to ensure a steady income stream that will not run out. Purchase some property that you can earn an income from during retirement; invest in bonds and low maintenance mutual funds.
    5.) Plan for the inevitable medical expenses that come with age. The Law allows for a dedicated retirement account used exclusively for health care to be non-taxable, if health issues are likely, start one. Look at a life insurance policy that includes living benefit provisions, or look into long term care protection. If your company offers an HSA, enroll, and start paying into it.
    6.) Save, save, save. Find high yield savings accounts, and be certain to have an emergency account. Having one allows you to be able to not have to make withdrawals from your retirement funds, or acquire more debt. Having one allows you to be able to make investments that otherwise would only be dreams.
    The best way to alleviate worry is to trust; Faith in the One who provides for us, and being a good steward of what we're given allows us to sleep at night. Hopefully there are ideas here that will help you. Please feel free to contact me if you would like a more personal analysis of where you sit. A great question, and one I'm glad that you asked. Thanks!
    Answered on July 28, 2015
  3. 37396 POINTS
    David G. Pipes, CLU®, RICP®PRO
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    King Solomon had a keen insight into exactly what you are asking. In Proverbs 6:6-8 we read, “Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.” Ants have done this for millennia. Of course they haven’t the benefit of the internet and financial pundits but they spend their days preparing for the days to come. In another place King Solomon spoke of those who would not leave the safety of their home for fear of what might happen. Again, that doesn’t work either.
    Answered on August 11, 2015
  4. 1976 POINTS
    Ronald HinchPRO
    Regional Marketing Director, Capital Choice Financial Group,
    Your 401k will be there if you trust the company you work for and the company that holds the investment. If you have any doubt then do some investigating yourself on the company that brokered the retirement plan and the family of funds that is represented in the portfolio. However, the company and the portfolio of funds can be sound but the market can take a hit and hurt your ultimate return of the investment. Make sure when investing that you are properly allocated according to age and time to retirement and always invest up to the employer's match. You should be ok!
    Answered on August 18, 2016
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