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Hi, I'm sorry, I'm a super rookie on this. I have my employer plan 401(b) managed by Prudential Financial. I read online that many people are sharing similar thoughts on how they feel they've be ripped off by their employer, that their retirement plan advisor manage their portfolios incorrectly and etc. I am now wondering should I stay with Prudential Financial or move to let's say, Blooom, or any other professionally managed firm. All thoughts and suggestions will be appreciated in advance. Thanks
The question is what are the fees. Both the fees you are charged to run the plan (could be zero, employer could pick up) and the fees charged for the funds you invest in. This fee is usually split with the groups running the plan but not your employer.
There are different letters that go with the funds. As the fund grows it should move to the lower costs options. I think the R (retirement) funds are the lowest costs. You do not want any fund that has an A,B, or C. Maybe someone else can comment on the fund classes.
My bias is that any plan with an insurance company is more expensive than one with another type trustee, If you can move anywhere look at Vanguard.
The fund fees vary by type but you want fees under 1% and probably 0.5% unless it involves funds that require more management due to the type of investments.
Hi, I'm sorry, I'm a super rookie on this. I have my employer plan 401(b) managed by Prudential Financial. I read online that many people are sharing similar thoughts on how they feel they've be ripped off by their employer, that their retirement plan advisor manage their portfolios incorrectly and etc. I am now wondering should I stay with Prudential Financial or move to let's say, Blooom, or any other professionally managed firm. All thoughts and suggestions will be appreciated in advance. Thanks
You don't describe how you are being ripped off. This leads me to the conclusion that you have no idea what you are talking about.
You don't describe how you are being ripped off. This leads me to the conclusion that you have no idea what you are talking about.
In general all 401(k) plans are a ripoff. Most people would be far better off in something like the VOO Vanguard S&P 500 tracking ETF with 0.05% net expense ratio. In current the 401(k) plan I have, the funds I can pick from have at least a 1% management fee and most are up over 2%.
In general all 401(k) plans are a ripoff. Most people would be far better off in something like the VOO Vanguard S&P 500 tracking ETF with 0.05% net expense ratio. In current the 401(k) plan I have, the funds I can pick from have at least a 1% management fee and most are up over 2%.
Does your 401K let you buy stocks? If so then just purchase an ETF problem solved
Does your 401K let you buy stocks? If so then just purchase an ETF problem solved
In all these years with different employers, I've never had a 401(k) plan that allowed you to buy anything but their short list of mutual funds. That's pretty much standard operating procedure. The financial services industry doesn't administer 401(k) plans for charity. They're in it for the management fees.
HBO's Last Week Tonight with John Oliver had a show about all the retail financial services profiteering a couple of weeks ago. He touched on the reality that "Financial Advisor" doesn't mean they are at all qualified or certified. The whole Financial Advisor thing of trying to sell high commission annuities. He covered the 401(k) fee thing. No news to anyone who pays attention to all of this but presented in a very humorous way.
same here , never had a 401k with a brokerage account option . in fact there was no plan with one even available to us and i was on the 401k committee
My employer allows you to invest your 401k in a Charles Schwab brokerage account if you wish. The annual fee is $50 for this option so it's a great plan. However they have a .01% SnP 500 fund that is on their list of mutual funds they offer outside of Schwab so I stick with that for now.
I've been lucky in my 401k options my whole life. I've had 4 employers, two offered fidelity, one Vanguard, and one has a private custodian where you can opt into Charles Schwab. All have offered the better funds at much less than 1% with no fees for the account holder other than the mutual fund expense ratios.
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