Account Reviews

Hi, I'm Matt Daley. Thanks for tuning in to the Financial Success Academy.

In this episode, we'll discuss the regular 457(b) and 401(a) account reviews that we do and the common mistakes we see.

Your 457(b) account is one of the greatest vehicles through which you can access the power of the capital markets and grow the wealth that you'll need to successfully retire in the future.

Once or twice a year, we log into your account and conduct a formal account review. The main purpose for this review is to help you avoid some of the investment mistakes we see frequently.

After reviewing your account, we will send you an email summary of your account vitals. This could include your current balance, investment allocation, contribution rate recommendations, and financial planning tips.

One mistake we try to prevent you from making through your account review is timing the market. Timing the market is when you make an investment decision based on what you think or feel the market is going to do in the short term. This typically involves moving your money from an asset like stocks into an asset like cash or bonds and vice versa. The problem with attempting to time the market is that you have to execute both the sell and the buy back in decisions perfectly.

Behavioral finance teaches us that psychologically, fear and greed will prevent us from making these two decisions correctly, and the typical market timer will underperform the market in a majority of cases over time. We will always plead with you to call us before you ever make an investment allocation change in your account. We want to make sure you understand the risks and implications of the decision you're making and that we're making an adjustment to your investment portfolio for the right reasons.

Another common mistake we see is not saving enough early in your career for retirement. You may be saving smaller amounts now with the intention of catching up in the future. The truth is, catching up rarely happens, and unexpected life circumstances can make catching up very difficult. The dollars that you contribute to retirement accounts in your twenties and thirties are exponentially more valuable than dollars you contribute in your forties or fifties because of the time value of money. We'll often encourage you in our account reviews to contribute more or work towards reaching the annual IRS maximum.

Finally, the entire reason Scott and the team spend hundreds of hours meticulously reviewing these accounts is to help you. All we're trying to do is help you be successful in these accounts and ultimately save as much as possible for retirement. We're acting in your best interests, and we encourage you to implement the advice and insights provided during these account reviews.

If you ever need to change your deferrals, adjust your allocation, update your beneficiary or your profile information, please give us a call to assist you more directly with your payroll department to make these updates for you.

We hope you found this video helpful. Stay safe, and thanks for tuning in.