Most Retirement Accounts Mismanaged by Investors

Consider Death Tax Planning Before Its Too Late!

American Express recently reported the results of a national survey seeking to evaluate the management of retirement accounts by American investors. The survey, completed by Amex’s Global Marketplace Insights unit uncovered some disturbing facts. The survey found that one-third of those surveyed maintained three or more retirement accounts, while one out of every six people owned five or more accounts. The survey discovered bad habits and misperceptions by investors in their management of retirement accounts.

The survey, for example reveals that many investors have a false sense of being well diversified, mistakenly believing that owning different accounts equates to diversification. Of course, management of multiple accounts makes management more difficult for the investor. This difficulty is nowhere more evident than in the shocking statistic that almost one-fourth of Americans spent no time at all reviewing their retirement accounts. Half of the investors surveyed spent less than one hour reviewing their investments.

  

The most shocking statistic is that seventy percent of all investors with employee-sponsored retirement accounts mistakenly believed that they paid no fees for the management of these accounts. Needless to say, every retirement account, including both Roth and traditional IRA accounts require some level of expense for asset management and administrative cost.

But more disturbing is that American investors are unaware of the benefit of tax planning for these accounts. Most investors manage their accounts using only the tools provided by minimal compliance with IRS regulations, thus ensuring that these accounts realize maximum income and estate taxation. If you aren’t aware that you can lose as much as seventy-five percent of your retirement account to taxes at death, get some immediate advice!