Of Counsel Michelle Capezza shared comments with Fiduciary News about how 401k fiduciaries can implement risk capacity, including the importance of providing retirement plan participants with balanced educational materials.
"When it comes to 401k plan investment options, for example, plan educational materials should include an explanation of the difference between risk capacity and risk tolerance so that plan participants understand that even if they are comfortable with aggressive investing, that they must be cognizant of such things as their actual financial picture, time horizon for investing and ability to absorb losses, retirement goals, and overall capacity to take on risk," Michelle says.
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