Help with 401(k) accounts boosts performance, study finds

Workers who receive help with their 401(k) accounts achieve higher results than those who make their own investment decisions, according to a new study by Aon Hewitt and Financial Engines. 

Workers who receive some type of help with their accounts experience 3 percent higher returns on average than those who do not receive help, the study found. 

Target-date mutual funds, professionally managed accounts and online advice were all defined as help for the purposes of the study.

Investors who were spooked by downturns in the stock market and then failed to reinvest before market recoveries saw their investments take a large hit, the study said. 

"When markets are as volatile as they are now there is a substantial opportunity to make some very bad mistakes," said Christopher Jones, chief investment officer for Financial Engines. "Particularly if you're a near retiree. That can be very damaging." 

Other common investor errors include choosing an inappropriate level of risk for their age and years until retirement; investing too much money in employer’s company stock; failure to periodically rebalance porfolios; and complacency about investments, the study said.

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