I am reading the four pillars of investing by Bernstein. It is a fabulous book. I am so glad to read that sticking with the index and some other basic selections is the way to go instead of chasing the market. This is the first time that I actually read something that makes sense and I find the insight into the mutual/broker type of businesses very refreshing. I am in the chapter where he discusses the crooks at the 401K management companies.
Based on this I decided to look at what my company's 401K management fees and other fees are. It is virutally impossible to look that up online. It mentions there are fees, but finding what they are is not easy. The prospectus is a huge tab delimted file. The fund names in the prospectus do not even match the fund names of the choices that are available in my account. I have to guess what could be what. Anwyay, from what I can see is that I am charged insane fees and sales commissions. 2% acquisition/redemption fee + 2% management fee.
So if in one year, I buy $1000 of fund A and then switch to fund B, I pay $20 in (acquisition) + $20 (redemption) + $20 (acquisition) + $20 (management) = $80 in fees. That is 8% of my money that goes to this bunch of idiots at Hewitt for doing nothing. Now I understand why my account is only going down (and I am not trading actively). No real info is available on their S&P 500 selection - that is my only hope of low fee/no load.
I work for a large company, they could have negogiated something better. The least they could do is to keep these financial managers offsite from now on. They are ready to come in again and entice us with 'education' to make some different choices in the account mix (more acquisition/redemption). Their latest new 'service' is automatic rebalancing for which they only charge 0.25% + (all the other redemption/acquisition fees they don't tell you about).
My biggest concern with my 401K now is to ensure that it does not errode too much before I quit and roll it into my Vanguard account. I am not even concerned about it growing. I don't want to give up the tax advantage and company match.
Vicky
Based on this I decided to look at what my company's 401K management fees and other fees are. It is virutally impossible to look that up online. It mentions there are fees, but finding what they are is not easy. The prospectus is a huge tab delimted file. The fund names in the prospectus do not even match the fund names of the choices that are available in my account. I have to guess what could be what. Anwyay, from what I can see is that I am charged insane fees and sales commissions. 2% acquisition/redemption fee + 2% management fee.
So if in one year, I buy $1000 of fund A and then switch to fund B, I pay $20 in (acquisition) + $20 (redemption) + $20 (acquisition) + $20 (management) = $80 in fees. That is 8% of my money that goes to this bunch of idiots at Hewitt for doing nothing. Now I understand why my account is only going down (and I am not trading actively). No real info is available on their S&P 500 selection - that is my only hope of low fee/no load.
I work for a large company, they could have negogiated something better. The least they could do is to keep these financial managers offsite from now on. They are ready to come in again and entice us with 'education' to make some different choices in the account mix (more acquisition/redemption). Their latest new 'service' is automatic rebalancing for which they only charge 0.25% + (all the other redemption/acquisition fees they don't tell you about).
My biggest concern with my 401K now is to ensure that it does not errode too much before I quit and roll it into my Vanguard account. I am not even concerned about it growing. I don't want to give up the tax advantage and company match.
Vicky