Is Your Retirement Account Underperforming? Here’s What You Can Do

Many investors find themselves frustrated with the lack of growth in their retirement accounts. With upcoming market volatility, they are searching for ways to limit their losses. Here are some tips and tricks to help you determine the best way to grow your retirement account or avoid undue losses.

Employer-Sponsored Retirement
It is important to note that employer-sponsored retirement accounts, such as 401(k)s, 403(b)s, and 457 plans, offer preselected investment options dictated by the plan’s fiduciary. Depending on the company’s size, these options may range from as few as 10 to thousands through a feature called BrokerageLink. The best way to grow your account is to evaluate all available investments and identify any that are currently outperforming your selections. You can do this by looking up the ticker symbols and reviewing them on third-party websites like Morningstar or Yahoo Finance. Use these platforms to compare the performance of your current holdings with other available options. It is crucial to rely on third-party sources rather than your employer, as employers are not required to report performance in real time. This means performance figures could be from last quarter or even the beginning of the year. Your selections should align with your risk tolerance, financial goals, and top-performing investments.

Evaluate Your Performance
Establishing a routine to evaluate investment performance quarterly or monthly will help you understand market trends and prepare you to make changes if necessary. If none of your available options are performing well, consider directing your contributions into a cash-equivalent fund or a stable value fund. These funds are tied to interest rates and, in a rising-rate environment, may provide a better return. Later, you can transfer these funds into an investment with stronger potential. There is little benefit in continuing to invest in a declining market without a strategic approach.
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Regular Portfolio Assessment
To stay on track, compare your investment growth to a benchmark like the S&P 500. This will help you assess how your portfolio performs relative to the market average. While many investors focus on gains, it is just as important to monitor losses and ensure they remain within an acceptable range.

As a financial advisor, I have developed a structured process to maintain and set goals for the accounts I manage. Additionally, I regularly check in with clients who have employer-sponsored plans to ensure they are optimizing their investment options. This proactive approach fosters engagement and confidence in achieving long-term financial success.

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