Thursday, September 24, 2009

"Don’t Orphan Your Retirement Assets!" - Guest Blogger Aaron Pottichen

Today's guest blogger is Aaron Pottichen. Aaron is a financial advisor with Merrill Lynch who works with individuals that have gone through career transitions and helps them restore confidence and clarity in their investment and retirement plans.

Don’t Orphan Your Retirement Assets!

By Aaron Pottichen

As a Financial Advisor, I have had many conversations with individuals and while discussing their retirement investments it is pretty common to discover that they have orphaned retirement assets at an old employer. And when we have gone through a market that has had such dramatic volatility it can be very detrimental to your future retirement lifestyle to not keep those assets close and be aware of how they are invested.

In fact, recent data has shown that nearly 50% of the people who lost their jobs in the first half of 2008 are in this mode. Of those that lost their job in the first quarter of 2008, 43% of them have left their 401k assets with the employer that gave them the boot. (On a side note, you do have the option to keep your assets in your old employer’s 401k plan, unless they require you to take a distribution.)

So, what does this mean? What’s the big deal you might be asking? Well, the big deal is that for many people their 401k represents a large portion of their future retirement assets, yet when they lose a job, the data shows it’s the first thing close to half of the people tend to ignore.

I’m here to tell you that finding gainful employment or generating income for your lifestyle is important, but DON’T ORPHAN YOUR RETIREMENT ASSETS!

For many people, the lost of job can be a traumatic and scary situation. What to do about the mortgage, insurance, groceries, the subscription to Tattooed Dogs magazine and all the other stuff we need income to pay for. Instinctively, we go into survival mode. Even those with all the talent and connections in the world have these thoughts rush through their head.

And when we go into survival mode, we tend to ignore and neglect those things that don’t help get us out of it and focus on things that will, i.e., find another job or source of income. Now, I know some of you may read this and think I may be going a little overboard, but recent data clearly would suggest otherwise.

My advice for anyone going through a job transition is to be aware of what options they have regarding their company retirement plan assets. Take the blinders off for an hour or so regarding finding another job or source of income and educate yourself. If you find the whole task daunting and time consuming, contact a financial professional to assist you.

Leaving a job can be tough, just don’t make it tougher on yourself and orphan your retirement assets along the way.

Have A Great Day.

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