Are You Satisfied with the Performance of Your Retirement Policies?

If your savings for vacation falls short, you can cut a few days off your trip. If your funds for retirement income fall short, cutting days off your retirement may be more painful. That’s why keeping an eye on your policies and assessing their returns is important.

Measuring the performance of your policies may not be as simple as comparing the value at the end of the year to the value at the beginning of the year. As Morningstar points out , you need to include your contributions (in 401(k)s, including company-matching contributions) and any fees charged by the insurance company, as they may affect your returns.

Even after you adjust for those factors and come up with a rate of return, you should figure out what that number tells you. There are lots of benchmarks you can compare to, such as the S&P 500 index, but you need to choose an appropriate benchmark. Whether or not your performance matches your benchmark, you should also assess whether it meets the rate of return you need to fund your retirement expenses.

It can be harder to recover from poor performance during retirement. When you’re contributing to your retirement policies, market downturns can mean a chance to buy discounted shares. But, once you’re making withdrawals, downturns could mean selling more shares to obtain the same amount of cash.

To learn more about retirement income call your financial professional. You’ll be informed about retirement income options and which plan may be best for you.


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