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A Decision Not Made Is Still a Decision

A Decision Not Made Is Still a Decision

July 24, 2023

If you're hesitant or unsure about making important investment choices, remember the advice from motivational speaker Brian Tracy: "Any decision is better than no decision at all."

Not taking action when it comes to investing can have serious consequences for your financial future, even though it may happen quietly and without you realizing it. Let's look at some common examples.

Your 401(k) Plan

One of the biggest mistakes is not enrolling in your company's retirement plan, even though many employers automatically enroll their employees. By not participating, you not only miss out on a great way to save for retirement but also give up the money your employer would have contributed. Not participating can be a costly decision.

Another way indecision affects people is by not choosing how their 401(k) contributions are invested. If you don't make a selection, the plan may automatically invest your money. However, this investment choice may not match your goals, risk tolerance, or the amount of time you have before retirement.

In most cases, you must start taking money from your 401(k) or other retirement plan when you turn 73. These withdrawals are taxed as regular income, and if you take them before you're 59 and a half years old, you may also have to pay a 10 percent federal income tax penalty.

Non-Retirement Investments

Just like stuff piles up in our homes over time, some investors end up with a collection of investments that don't align with their goals. They may buy investments based on what they've read or someone's recommendation, or they might have investments from a previous employer's retirement plan.

As time passes, some investments that once made sense may no longer be a good choice. The market changes, and what was beneficial before might not be advantageous now.

If we don't review our investments periodically to remove inappropriate ones or see if they match our current goals, we're essentially deciding to keep assets that might not be suitable.

No matter what your situation is, it's important to give careful attention to your retirement investments and make thoughtful decisions. Your future retired self will be thankful that you took the time to do so today.