Mid-Career: Uneasy Participant - Julia's and Jorge's Annual Review

Strategy

Portfolio composition: Pre-built portfolio investment funds.

Knowledge is power. Dispel myths and misunderstanding by increasing your investing knowledge. Explore ProsperiGuide or your pension plan administrator’s website, which offer a vast array of in-depth investment and planning information.
- Use the plan administrator’s service desk to ask questions or get directions to specific information on the website (such as, help guides that decipher investment reports or guide you through the planning tools).
Annually set a date to review the entire portfolio.

1. Check for suitability:

Has the personal situation changed (for example, job change, marital status)?
Is the combination of funds and other investments still suitable?
Has the target asset mix changed?
Did the portfolio cause loss of sleep or excessive concern over its performance within the past year? Why or why not?

2. Monitor, report and evaluate portfolio parameters:

Does the asset allocation of each pre-built portfolio fund match the target asset mix?
Count the number of funds and investment accounts; has anything changed?
- Can any additional consolidation occur—fewer accounts or few investment funds?
Prepare for your annual review by learning how to read an investment report and what a benchmark is.
Review investment fund reports for each fund held:
- Compare each fund performance against its benchmarks and similar funds.
- Is performance within an acceptable range above/below the benchmarks?
Review fees of funds held and those available through an employer’s group plan
- Are lower fee alternatives available?
Are returns as expected? If not, is it due to an underperforming or high-cost fund a broad decline in the markets?
- Does the retirement plan need to be updated to reflect any unexpected returns?
Advanced step: Are investments held in registered and non-registered accounts adjusted to be tax-efficient?
- Investigate: Design Tax-Efficient Portfolios

3. Identify required changes and implement portfolio adjustments:

Identify investments that need to be sold and investigate replacements based on suitability, asset mix, fund performance and fees.
Check that the underlying asset mix of each pre-built portfolio fund has not changed and is still aligned with your target asset mix.
Rebalancing back to the fund’s target asset mix is automatically done by the fund managers
- You don’t have to do this yourself.
Is reallocation necessary? Are you less than 10 years to retirement?
- Check the equity allocations and “glide path” of any target date funds:
  - Is the transition too much or too fast?
  - Plan when and how to transition any pre-built balanced or portfolio funds to an income-producing portfolio as retirement approaches.