Are Fees Robbing Your 401(k)?

Wow January is almost over! It has been a busy month. I have been meeting with clients and protecting their families. Along with that I have invested in a new server and additional Security Protection for my clients. I am happy to announce I just have to put in a few passwords and press a couple of buttons. My IT professional Doug Harvey has been fantastic! There has been a few kinks but he has been fabulous in setting it up. I will let you know a little bit more about his services, but for now I highly recommend him. I hope you are organizing your legal and financial house! I know there is so much to do in the new year but you just have to keep checking off your list. Here is a bit of information about 401 (k)’s I hope you find interesting. If you need a referral I have several that I can recommend. Love to hear from you soon. I will be in Big Bear this week enjoying some cool weather and maybe a little bit of skiing or at least playing in the snow. Blessings, Click HERE to view my blog

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You’re a smart money manager You’re planning well for retirement You put the most you possibly can in your retirement accounts, including a 401(k)… Then you get your statement and find that you’re being robbed blind by outrageous fees. And what’s even worse, you were never given access to information that would tell you what those fees are. The good news - that’s about to change In October 2010, a new rule issued by the Department of Labor requires 401(k) plans to not only disclose their fees up front but also explain them. The bad news is that this rule is an improvement but it’s not perfect. You’ll be told how much you pay in overall expenses but you may not be told how much of that goes to investment management fees as opposed to administrative costs. What You Can Expect Once a year, your 401(k) plan will send you a breakdown of the annual operating expenses for each one of the investment options they offer. The breakdown will show the expenses as a percentage of the assets and a dollar amount per thousand dollars invested. They will also provide sales fees and any other charges associated with each investment option. You’ll receive a quarterly statement showing your 401(k) plan’s expenses for administrative costs such as accounting and record keeping. The statement you receive will only show the fees deducted from your account. Some 401(k) plans will take administrative costs directly from your balance while others use a portion of your investment expenses to cover some of the administrative side. One thing to note - any indirect fees for administrative costs won’t have to be broken out, so chances are they won’t be. For example, if you see a charge of $250 on your account, you won’t know exactly how those fees were spent (i.e., legal fees, accounting costs, etc.) The Benefit of Disclosure Knowing what you’re being charged gives you the opportunity to compare funds. Take a look at the fees for each of the investment options your 401(k) plan offers. Balance those fees against their historic returns and see if the higher paying funds are really a better deal for you. Even though you don’t get a full, line item disclosure of what the administrative costs were for your particular plan, you still have a breakdown of what the investment management fees vs. administrative costs are. This should give you the information you need to pressure your 401(k) plan to keep costs down. One way to do that is to encourage competition. Compare your plan to other plans and see how your administrative and investment fees stack up. If there’s a better deal out there, make sure your Human Resources department knows it. They can use that information when it comes time to negotiate with your plan provider. Would you like a second opinion about your 401(k) investments? Want to make sure you’re making the right investment choices and structuring your retirement to optimize savings?br> WWe can help. I have a couple of great folks that I work with that can take a quick look at your account and see what is going on. Call us to schedule your Family Wealth Planning Session today. Our Family Wealth Planning Session is normally $750, but this month I’ve made space for the next two people who mention this article to have a complete planning session with me at no charge. Call today and mention this article.