Workers who use a full array of 401(k) investment help provided by their employers have better returns than those who do not, according to a study published this month by Hewitt Associates and Financial Engines.
Hewitt Associates, which has an office in Norwalk, and Financial Engines examined the behavior and portfolios of more than 400,000 retirement plan participants between 2006 and 2008, a volatile period for stock markets.
Half of companies now offer their employees some type of 401(k) investment advice.
The median annual return for participants using investment help was almost 2 percent higher than those who did not, and the difference became even more dramatic for those who made 401(k) investments at a younger age.
As an example, Hewitt Associates and Financial Engines said a 25-year-old who uses professional investment help when investing $10,000 could have $106,000 by age 65 ”“ compared with just $52,000 had he or she not used help.
Participants who use professional investment help also follow a more appropriate “glide path,” making higher-risk, higher-reward investments early in their careers; then moving into safer investments as they near retirement.
