If you’re eligible for Financial Engines, you have access to help managing investment risk. This tutorial provides you with easy steps so you can start taking action. We encourage you to visit your Financial Engines account and start using our advice to help grow your retirement savings.
The Big Play: Deciding About Risk
There are two factors that impact how much risk you can and should have in your portfolio: your attitude and your age. Your overall tolerance for risk can be high, low or somewhere in between. It depends on your point of view – are you aggressive and therefore willing to take more risk? Or conservative and semi-risk averse?
Every investment carries some amount of investment risk (which means you can lose money), but some have more risk than others. As a general rule, investments in stocks are riskier than bonds. Some investments (like company stock) carry a lot more risk. We base our investment recommendations on your tolerance for risk – which you can change at any time. Visit your account to specify your risk tolerance and we’ll adjust your investment advice accordingly.
Yes, your age makes a difference. Is your portfolio age appropriate?
Often, if you are younger, you can tolerate more risk since you have time on your side. If you are older, you may want to be more conservative since you won’t have the time to earn back your losses before you want to retire. It can be confusing, but we give you advice that maps to your age and your personal preferences so your 401(k) is optimized for the best growth possible. Visit your account to see your current level of risk and make adjustments if it’s not right for you. If you need help, we’re here for you.
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Follow this easy, simple plan and put your money to work.
* Within the Help group managed accounts and online advice are provided by Financial Engines Advisors L.L.C. The data for the research are drawn from 14 large 401(k) plans. All returns reported in the research are net of fees, including fund specific management and expense fees, and managed account fees. Please access the report for a full description of the methodology and data used.