If you are a California State employee you may have noticed that Savings Plus promotes three ways for participants to invest, but there is actually a fourth option for those with higher expectations. Savings Plus offers a set of Target Date Funds for what it refers to as 'do it for me' participants. TDF's are fund of funds that provide active portfolio management for those who value convenience. Savings Plus also offers a fee-based management solution for the 'manage it for me' participants. This program is provided through a Nationwide ProAccount® and offers modeled allocations using the plan's core investment options. The third option is for 'do it myself' investors who want to manage their own portfolio using either the plan's core funds or brokerage window feature. What Savings Plus doesn't mention is that the same Self Directed Brokerage Account feature set up for 'do it myself' participants also allows you to hire a personal portfolio manager.
This Fourth Option offers distinct advantages that savvy investors value:
- More managers
- More investment strategies
- Greater risk management features
- Minimize potential conflicts of interest
- Minimize glide path risk
- Transparency of all fees and expenses
- Comprehensive and continuous investment advice and planning support
At Next Level Investor we facilitate independent management of self-directed brokerage accounts through select Registered Investment Advisors. We function as an independent investment advisor representative and are not affiliated with any retirement plan sponsor or provider.
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The target date of a target date fund may be a useful starting point in selecting a fund, but investors should not rely solely on the date when choosing a fund or deciding to remain invested in one. Investors should consider funds' asset allocation over the whole life of the fund. Often target date funds invest in other mutual funds and fees may be charged by both the target date fund and the underlying mutual funds. The principal value of these funds is not guaranteed at any time, including at the target date.