Advice from my 401k provider
A while back, I got a letter in the mail giving me a “check-up” of my retirement savings, and an offer to sign up for (not free) account management services on my 401k (no thanks!).
Since I’m maxing out my 401k this year, I was feeling a little smug when I got to the part where they were going to tell me whether I’d have enough money to retire or not. Until I read their conclusion: “We recommend saving $16834/yr.” What?!? But I’m only saving $16,500! That’s not enough?!
They have no knowledge of my maxed Roth IRA, so I think I’m still ok in their eyes. Still, I always thought I was oversaving a bit for retirement, with the idea that maybe someday I wouldn’t be able to save quite so much (kids, etc.). I don’t even bother with the online “what do you need for retirement” calculators because so many assumptions are built into them that I never trust the result. I just save the maximum possible in tax-advantage accounts, and I’ll figure out the rest later.
Then again, it is in their best interest to not only sell me their “advising” service, but to also have me buy more of their funds, so they can collect more of my fees. Do you trust advice given to you by your 401k management company?