401(k)
Calculator
Medicare
Application
Nationwide
Retirement
Solutions
Retirement
Plaques
Roth IRA
Contribution
Limits
Simple
Retirement
Calculator
Social
Security
Verification
Senior Retirement Tips :: Fidelity 401k
Fidelity 401k: Considering a 401k through Fidelity
Custom Search
Fidelity 401k is a division of Fidelity Investments devoted to managing the 401k plans of group plan employees.
Typically, large employers will hire Fidelity to take over and manage their employee 401k plans, meaning you direct and organize your retirement savings through Fidelity, not your employer.
But, what are the benefits and drawbacks of this type of plan? Is it better to utilize the services of a company like Fidelity or manage your own 401k personally? How does Fidelity 401k measure up in terms of performance, particularly when compared to similar, competing terms?
For the answers to these questions and more, keep reading.
Benefit – Free Financial Advice and Service
Typically, when a company hires an outside firm to manage their employee’s 401k plans, the service charges are waived, reduced or passed on to the employer, not you.
That means keeping your 401k with your employer-appointed firm (in this case, Fidelity) can save you money. Of course, that doesn’t mean they’ll make you money.
Benefit – Independent 401k and Retirement Plan Management
By utilizing a service like Fidelity 401k, you can direct your Fidelity retirement advisor to populate your portfolio with the approved funds that you choose. That means if you don’t want to stock up with shares from your own company, you don’t have to.
Most Fidelity 401k plans allow employees to choose amongst a mix of employer-approved funds and investments. From there, employees can pick and choose based on their risk threshold and personal preferences.
If an employee doesn’t choose, the investments are automatically made based on their contribution amount and age.
Drawback – Fidelity Funds and Reduced Investment Freedom
Because your 401k is essentially managed by Fidelity 401k, you’ll often find yourself limited to Fidelity funds and/or employer-approved funds.
This can be a major drawback for people who want greater freedom for their 401k and to make their own retirement investment decisions.
If you’re looking to have greater control over your retirement investments, consider rolling your 401k over into an IRA (Individual Retirement Account).
Benefit – Easy Rollover and Continuation
One benefit of sticking with an employer-appointed 401k management company like Fidelity is that you can easily switch over to an IRA or another 401k if you ever leave your job.
Because Fidelity runs a consumer investment division, they can quickly and easily roll over your account, taking you from an employee plan participant to an individual investor.
Draw – Fidelity Funds Performance
In the last year, most Fidelity 401k plans have not seen gains. However, almost all funds and retirement investment management firms have failed to see gains in the last year.
Typically, Fidelity performs well and is known for offering its participants well-balanced portfolios that error on the side of caution rather than big-gain risk taking.
See also:
All Site Articles for Senior Retirement Tips
Custom Search
Learn great ideas about your opportunities to retire in Florida with
The Florida Retirement Book
Order Online
24 Hours a Day
7 Days a Week
365 Days a Year!
Copyright 2008
SeniorRetireTips.com :: Fidelity 401k