5 Signs A Person Might Need To Change Retirement Plans

People often neglect to plan ahead on retirement and often make the mistake of winging it when selecting a retirement plan.  There are five signs that a person should look for to determine if they might have chosen the wrong retirement plan:

1. A person should not pay more than 1% in fees. According to this column people should research the name of their retirement funds and examine the fee section. 
2. The investor has randomly selected mutual funds.  Blindly selecting a collection of mutual funds for the sake of diversifying the portfolio can be a risky move.  It might be a better idea to choose a target retirement fund.
3. Avoid overlooking index funds.   Index funds give people the ability to own a diverse collection of stocks from different sectors at a reduced cost. 
4. Don’t let everything sit in a money market fund.  Certain events like the 2008 financial collapse might scare some people away from investing in the stock market, but the money will not grow as much if a person only invests in U.S. Treasury bills.
5. People should make sure they are saving enough for retirement.  If a person is only contributing about 5% of their income towards their retirement then that could be a problem.  A recent college graduate should be putting at least 13% of their income into retirement savings.

See Alvin Carlos, 5 Signs You Have The Wrong Retirement Plan, Credit.com, July 3, 2015.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.