As a financial advisor, I routinely get letters and questions from clients, and thought our readers might benefit from this one. :)
Several years back i was gainfully employed at XYZ corporation, enjoying a lucrative career and rise to the top when the the inevitable happened, the company and I no longer saw eye to eye on my future. I was laid off, forced to seek employment elsewhere.
Upon my untimely departure, I was presented with a termination packet for my 401 k- plan, as well as other assorted benefits that former employees (apparently) no longer have access to. Emotional and unsteady at the time, I tucked the packet away until an undetermined time in the future when i felt the strength to deal with the aftermath of my ill- fated, untimely departure from XYZ company.
Three years later, I am now gainfully employed at LMNOP Corporation. Last week, while cleaning out some drawers, I uncovered the 401- k benefits package. The statement from three years ago reflected a healthy balance. Back then, I was contributing the max and had an employer match. Life was good.
Eager to see my holdings. I logged onto the website for my balance. In a state of disbelief, it is with a heavy heart that I report my 401-k is on life support and a shadow of its former self. Grief stricken, my plan is dying a slow death and I helped killed it!
What are the sanctions against someone who has committed the egregious act of slowly allowing a 401-k to die a slow and painful death? Where can I turn for guidance? Is there some type of support group for 401-k grievers? Is there any hope for me ? Is it too late?
Languishing in 401-k land
Dear Languishing in 401-k land;
Do not blame yourself! Lack of attention to your 401-k plan is not punishable my law, but many fine people like yourself have suffered needlessly, believing they are responsible for the demise of their 401 -k plan. Unfortunately, you did not take proper action at separation of service. Most likely, an emotional, bewildered, and stumped stated of mind, left you unclear as to how or even if you should make proper arrangements for your 401-k.
Many former employees often do nothing, and when left to function on their own, 401- k plans can experience symptoms of tiredness, lack of direction and performance issues. Coupled with on-going asset and administrative fees, your plan is likely experiencing atrophy as you are no longer able to contribute. Your are wise to seek emotional support as this can often be a difficult time when coming to grips with your failing and ailing 401-k asset.
Support groups can be helpful, but safety and stability is the name of the game now. Seek out market alternatives that will breathe new life into your plan which will maximize safety while providing potential for upside gain with no downside risk.
Ask your financial advisor for suggestions. With the proper guidance, many 401- k’s formerly on life support are now reflecting active and healthy balances once again. With the proper care and feeding, you can rejuvenate your 401-k asset from a dying to a thriving asset!