How To Deal With Employee Expectations During 401k Management Planning
People turn to financial advisors for their 401k management because they typically lack the time and knowledge to manage their retirement funds on their own.
Depending on the circumstances, employee expectations should align with their given portfolio and estimated future needs. As a first step, managing expectations will foster the most positive results.
The first step should always be to ask the right questions. What is their current financial situation? What is their family setup, and how might that change in the future? When are they hoping to retire, and what type of lifestyle would they desire as retirees?
These types of questions are essential. Two individuals may appear to be identical in terms of assets, but if they have vastly different hopes for the future, they could require drastically different plans. When you ask these questions early on, you can see whether their goals are something they can accomplish based on their current financial plans or if some adjustments will be necessary. And because of the nature of 401k management, the earlier you can get a sense of these questions and have them start planning, the better.
Backup plans are encouraged
If 401k management were an exact science, financial planners would all be replaced with automated services, and there would be one single obvious solution for everyone. But because economic markets can be volatile and unpredictable at times, it’s important to look at all possible outcomes of a 401k management strategy. A contingency plan will also minimize the chance that goals aren’t met.
Sometimes, the truth is tough to hear if it means they have to work longer than they thought. Luckily, financial planners can provide insight and well-seasoned expertise. An outsourced CPA firm is readily prepared to help offer the right guidance.
As an employer, you can only offer your advice where it’s merited and within your level of expertise. Hiring an outsourced accounting firm or financial advisor can help direct financial management needs to the right hands. Contact Tobin & Collins today!