Answer: Unfortunately, in most 401(k) plans, your account balance is dependent almost solely on the overall market level. After you retire, you will be able to roll the balance into a self-directed IRA in which you can own individual stocks, especially stocks that pay dividends. In many cases the dividends a company pays are far more stable than the share price of the company’s stock.
Think of owning a rental property that pays you $1,000 per month in rents. If the market value of that property drops in half, it doesn’t mean your rent drops also. The key is the stability of the rental income, not the market value of the property. Focus your retirement income planning on creating a monthly cash flow and try to put account values in perspective.
To locate experts in your state who can help you with these elder care financial matters, go to: www.ElderCareMatters.com – America’s online source for elder care experts plus information & answers about a wide range of elder care matters.
Philip C. Benedict, CFP
Benedict Financial Advisors, Inc.
Atlanta, Georgia 30328
Member of the national ElderCare Matters Alliance, Georgia chapter
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