Announcement

Collapse
No announcement yet.

401k fees & allocation

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

    401k fees & allocation

    So we had our annual 401k meeting at work. I was shocked as to how conservative the plan administrator advised the group. Also talking to coworkers they are losing a lot of value in fund management fees....as high as 6% for a fellow worker.

    Personally, I'm in my late 30s and have always been 100% allocated to stocks since starting my 401k when I turned 18. My annual management fee is 1.15%
    Gunga galunga...gunga -- gunga galunga.

    #2
    6% is nuts. What are they investing in that charges such a high fee?
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

    Comment


      #3
      Originally posted by disneysteve View Post
      6% is nuts. What are they investing in that charges such a high fee?
      That's total fees for the entire portfolio, so they have a lot of funds that charge close to 1% each to manage.
      Gunga galunga...gunga -- gunga galunga.

      Comment


        #4
        Originally posted by greenskeeper View Post
        That's total fees for the entire portfolio, so they have a lot of funds that charge close to 1% each to manage.
        The fees are not cumulative, so saying it has 6% fees is misleading. I have a spreadsheet that tracks my weighted average fee for my entire investment portfolio and it runs around 0.19%. If I had an average weighted fee of 1%, that would cost me an extra $7k a year.

        1% fees aren't the worst I've seen. My MIL averages 1.49% on her funds from her financial advisor. The highest is 1.9% and she is in a lot of front/back end loaded funds that charge to buy the fund, charge to own the fund and then charge to sell the fund. Total cost runs about 4% just for the privilege of owning a fund with below average performance.

        Comment


          #5
          Originally posted by greenskeeper View Post
          That's total fees for the entire portfolio, so they have a lot of funds that charge close to 1% each to manage.
          If each of their six funds charge 1%, that means they are paying 1% overall, not 6%.
          Steve

          * Despite the high cost of living, it remains very popular.
          * Why should I pay for my daughter's education when she already knows everything?
          * There are no shortcuts to anywhere worth going.

          Comment

          Working...
          X