Employers prefer that outsiders handle advisory work, he says, because they don t want to become involved in the potentially litigious area of giving investment advice. The Internet will also grow rapidly as an education tool. The service, accessible through the employer s intranet, solicits information about a user s assets and tolerance for risk. Allocating Your Assets Even without such customized tools, investors can custom-build their own portfolios. Once you retire, it s best to use other available sources of income first to allow your retirement plan balance to continue taking advantage of tax-deferred compounding, she says.
Asset allocation is a continual process.
As the markets fluctuate, you ll need to rebalance your account at least once a year to bring it into line with your desired asset allocation strategy. While it may be tempting to leave your stock market gains on the table, rather than transfer them to the more conservative side of your investment balance sheet, spreading your bets by rebalancing will help cushion the impact of a market downturn. These funds have preset asset allocations related to a particular investor profile, such as conservative, moderate, or aggressive. This fee generally ranges from .5 percent to one percent of assets, and is charged in addition to regular mutual fund expenses associated with the component funds. Balanced funds are another popular option.