The Search for a Better 401(k) Plan

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Small company plans must have and deserve an excellent quality retirement plan to ensure all employees can successfully retire. This may mean joining a ‘mutual fund’ of retirement plans. For any company which does not have the time or expertise to properly run their plan this is an excellent option.

Still, anyone at a smaller company who would like to cut costs in half while also improving the investmentchoices, as he did, would be wise to consider the hurdles he had to clear and the obstacles in his way.So why are all the details so important? Most people starting their careers now will spend 45 years trying to save enough so they can stop working someday. But if the investment costs and fees inside your 401(k) or similar fund average, say, 1 percent of your assets each year instead of 0.25 percent, the difference can cost over $100,000 by the time those 45 years are up.

And that’s just the fees side. Most actively managed mutual funds, which try to pick investments that will do better than an index of similar securities, often don’t actually outperform that index over long periods of time. Even so, many employers, out of ignorance or blind faith, don’t provide a full menu of index funds in their retirement plans

Small company retirement plans have been historically much higher priced than larger employers. This can be avoided with the proper help.

Please comment or call to discuss how your plan can be improved.

  • How to Manage Your 401(k) Through Market Down Swings (401kplanadvisors.com)
  • 401(k) Nation: Road To Retirement Gets Rockier (401kplanadvisors.com)
  • Court Rules Kraft’s 401(k) Plan May Have Holes (401kplanadvisors.com)
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