Comments on: 401k Plans and My Contribution

By: Meaghan

Meaghan — Wed, 29 Jul 2009 22:31:22 +0000

Thanks for sharing your thoughts.

By: ObliviousInvestor

ObliviousInvestor — Wed, 29 Jul 2009 12:58:30 +0000

Correction: The study was by the Investment Company Institute and Deloitte (Morningstar was not involved).

The link to the pdf is here: http://www.ici.org/pdf/rpt_09_dc_401k_fee_study.pdf

By: Avery

Avery — Sat, 25 Jul 2009 09:20:59 +0000

we do not have 401k plan.

By: Denis

Denis — Fri, 24 Jul 2009 20:13:58 +0000

@Jerry: I agree, I definitely am not afraid of retirement …unless if I’m living in the US when I’m retired. My goal is to move to where I was born, Nicaragua, and to have a very good lifestyle there. A dollar there goes a lot farther than here and because a lot of my family is still there, it’d be a nice transition.

By: Jerry

Jerry — Fri, 24 Jul 2009 10:12:25 +0000

@Denis, we also have Vanguard and have been really happy with them. I think contributing as much to your 401K is your only insurance from having to work an extra 10-15 years. Well, not unless you want to…Many people are scared of retirement. I don’t happen to be one of them;) I think the extra free time will lead me to places abroad and adventures I haven’t yet been able to take.
Jerry

By: Denis

Denis — Fri, 24 Jul 2009 04:06:25 +0000

I have a 403b and I’m very fortunate to have Vanguard which offers a great variety of funds with low % fees. Also, they waive minimums (usually 3k).

I contribute just 8% of my salary to it with no match (but in addition we do get a 9% of salary pension plan, paid by employer). Not to shabby, now I see why many people are still working there 10-15 years later.

By: marci

marci — Thu, 23 Jul 2009 21:45:05 +0000

I’m in the 401K for exactly the reason you mentioned – matched funds by the employer… So I contribute up to the maximum he will match. Easy way to double your money temporarily….(minus commissions and whatever the market does bad)

By: Adam

Adam — Thu, 23 Jul 2009 15:57:09 +0000

One day, we will cut out the middle man and be able to invest without excessive fees. The government already provides the Thrift Savings Plan (TSP) for some, so why not allow everyone to enroll?

By: MoneyNing

MoneyNing — Thu, 23 Jul 2009 15:39:06 +0000

0.72% of assets. Wow. I knew that when someone pitched to take over our 401k accounts in my old company, they said that they tack on 0.30%. I thought that was already crazy.

By: ObliviousInvestor

ObliviousInvestor — Thu, 23 Jul 2009 14:52:33 +0000

“I was actually told that having a limited selection is a good thing because it’s confusing to have too many choices. I agree completely, but it makes no sense to have choices that just suck.”

Hah. Well said.

As to 401k admin fees, Morningstar and Deloitte performed a study in the last year that found the median administrative fee on employer-sponsored retirement accounts to be 0.72% of assets. That, together with high-cost funds, *really* adds up over the course of a career.