Big Changes Coming for Your 401(k)

Find Out How Good Your 401(k) Really Is. Having trouble viewing images? Click here. March 20, 2012 Big Changes Coming for Your 401(k) The Tip: New information about your 401(k) fees gives you the chance to consult a professional to find out how good your 401(k) really is and how you can make better investment choices. If you're one of the 70% of 401(k) participants who believe your 401(k) services are free, prepare for a shock. In 2011, employees covered more than 90% of the costs of managing their workplace retirement plans. The median fee was $248 per plan participant. Surprised? This lack of education is one reason why the U.S. Department of Labor will now require financial institutions that manage 401(k)s to disclose their fees to plan participants by August 2012. Make It Work for You Use this new knowledge to your advantage. Start by bringing any questions about your 401(k) plan and its fees to your plan advisor. They'll identify what services those fees cover and discuss some details of your options within the plan. But your plan advisor's advice will be limited to the company's 401(k) options. Most plan advisors are human resources experts—not investing experts. While they may (or may not) know a lot about your company's retirement plan, they won't have the knowledge or experience to tell you whether or not you're getting a good deal on your plan's investment options. For an in-depth evaluation of your plan's mutual funds, review your 401(k) investing options with an investing professional. A pro will show you how those funds stack up in the mutual fund market. And because fees aren't the only factor to consider, your advisor will help you decide which of your 401(k) options will help you reach your goals based on both performance and expenses. Don't Settle for So-So The new rule also makes employers more accountable to their employees to find lower-cost, better-performing investment options in their plans. If you discover that your plan options are sub-par, ask for better options. After all, this is your retirement! Make sure you work with an investing professional you can trust. One of Dave's investing Endorsed Local Providers (ELPs) will help you evaluate your 401(k) plan options so you'll know if there's room for improvement. And because our ELPs have experience in all types of investing, you can rely on your ELP to help you build a sound retirement investing plan that goes beyond your 401(k). Contact your ELP today! Share this:

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