In Service Withdrawals

Great West is an insurance company based in Toronto, CA. What is happening to you is typical. your employer is obligated to provide you with a retirement benefit. They don’t want to have to actually pay you a steady income once you retire though, so instead they will wash their hands of you by contributing toward your retirement and hiring another company to give you investment advice, and make sure that you have a good variety of investment options. (if they didn’t hire someone else they would have to do this themselves, and would have to follow a whole bunch of rules and regulations.)

The company that they chose to handle your retirement then is Great-West Retirement Services, a division of Great-West insurance Co. They are the ones who will provide you with a bunch of investment options. those will probably include stock mutual funds, bond mutual funds, and some kind of “guaranteed” savings product. Conveniently all of these funds will be offered by Great-West. Great-West also won’t work for free, so you are going to be paying fees for the management of these mutual funds and bond funds. You will also probably get really low interest from the “guaranteed” funds because they are going to take the money you give them and turn around and invest it in the stock and bond markets for themselves, then pay you out of a part of their profits.

All this makes Great-West seem like a pretty bad deal right? Well it isn’t all bad. They will be providing you with solid investment advice (although you may have to pay them by the hour for it), and over time your account should grow. besides your employer is matching your contributions so you are getting some extra dough along the way.

If you want to avoid paying fees though, and want more flexibility in your investment choices, you will need to take matters into your own hands. make as many contributions as will be matched by your employer under the retirement plan, but anything beyond that that you wish to contribute, put into your own IRA that you set up with any broker. From this IRA you will be able to choose your own investments, different mutual funds, individual stocks, individual bonds, etc.

You won’t have to pay any additional fees for these contributions that you make to your own IRA since it will be with a company of your choice instead of only Great-West. however you can hire a personal investment advisor to handle this extra IRA if you don’t want to manage the money yourself, and he/she may charge you a fee to manage those funds, so either way you’re paying somebody. the big advantage to having a personal advisor though is that they are typically cheaper, give you personal advice, and will be able to provide you with more flexibility in your investment choices than what will be provided through Great-West.

Or if you are like most people, you will just do what your employer says, put all of your money in Great-West, pay the extra fees, and won’t bother asking anyone whether you should buy bonds/stocks, etc, so you’ll just pick a random mix that a computer suggests. I truly believe this a big reason why many people are unhappy with their retirement situation right now, but oh well..

Has anyone heard of Great-West Retirement Services (They will be …