If your company offers employees investment help with their 401(k)s, you’ll want to use this info — to show them just how valuable that help can be.
Employees who sought investment help with their 401(k)s saw an average annual return that was 3% better than those workers who handled their accounts themselves.
That’s according to a recent study by Financial Engines and Aon Hewitt, which tracked more than 425,000 employee 401(k) plans over a five-year period (2006-10).
The study considered investment help as:
- putting an advisor in charge of managing an account,
- seeking financial advice online (through the provider’s website), or
- setting up target-date mutual funds in the account.
That 3% makes a huge difference. Example: Say two investors have $10,000 in their 401(k)s at age 45, and one investor opts to get investment help from 45 through 65. With the 3% advantage, he or she would have around $30,000 more in that account than the employee who opted to go it alone.
