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Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k
- greattypo 11y agoThis is awesome. I've experienced first hand the hassle of setting up a 401k for employees (and now appreciate why so many companies don't offer it until they're bigger). In my mind, it would be a strictly better world where all companies could offer this benefit.
- harryh 11y agoI wish the law was rewritten so that this sort of savings benefit wasn't tied into your employer having to set it up. Get rid of 401ks and just raise the damn IRA limit.
- toomuchtodo 11y agoI regret having only one upvote. This is the way the problem gets fixed.
- harryh 11y agoUnfortunately I think the chances of this happening in the foreseeable future are quite slim. Alas.
- kasey_junk 11y agoSo much this
- SilasX 11y agoGreat that they're doing this! I especially like their philosophy here [1] about favoring index funds. Way, way too many employers give you a poor selection, loaded with actively-managed ones -- my last major employer did. (Even better would be for the law to not limit employee 401k choices to ones selected by the employer, based on some misguided belief that they benefit from having the same choices as the "highly paid employees", as required by the 401 code, given that those very executives don't actually rely on 401ks for retirement and thus have little incentive to get the choices right ... but hey, you gotta work with what you have.) [1] https://captain401.com/investments https://captain401.com/investments
- kellysutton 11y agoOur company uses Captain401. It's great!
- tyre 11y agoWe're a Captain401 user at Seneca Systems and it is fantastic. We can offer a 401k program despite being a small company plus they integrate with Gusto so I have to do nothing to actively maintain it. #TheDream As a founder, this goes beyond just another benefit. Supporting your employees' long-term financial future is really important. Maybe early employees make a few hundred million, but far more likely your company will fail. In that case, they shouldn't have lost years of savings potential.
- sguha 11y agohttps://captain401.com/pricing https://captain401.com/pricing How do these financial services justify charging a percentage of the funds managed? Is there more work involved in handling an account with a larger balance?
- SilasX 11y agoThey're competing with other 401k plans that do the same, but charge a much bigger percentage, and mutual/index funds do, in general, charge a percentage of the funds under management. Don't look a gift horse in the mouth. However, you're right that costs are less-than-proportional to funds under management, so they usually offer to lower the percentage as you invest more, cf. Vanguard admiral-class shares: https://investor.vanguard.com/mutual-funds/admiral-shares https://investor.vanguard.com/mutual-funds/admiral-shares
- sguha 11y agoOur company used Ubiquity https://www.myubiquity.com/retirement/plans/expressk/ https://www.myubiquity.com/retirement/plans/expressk/ which doesn't have asset based fees
- tosseraccount 11y agoVanguard average expense ratio: 0.18%
- harryh 11y agoJesus those fees are high. 50 basis points to just warehouse the money. Wealthfront charges half of that for some moderately sophisticated management. Plus even more on the employer side! Wow. And people say they are cheaper than other 401k providers? That's nuts. EDIT: OK, it appears (https://captain401.com/investments https://captain401.com/investments) that they will optionally do some automatic rebalancing for you so they're a bit more than just a warehouse but still.
- kbusque 11y agoHi Folks, Full disclosure, my company also provides small businesses with 401(k) plans. Fees are extremely important in a 401(k) plan. Guideline never charges fees on AUM. Your money is free to grow. Guideline's average expense ratio is .14 and made up of the very same Vanguard funds. How can we do this? Look at the form ADV for your providers, it will dictate how administrators are compensated. You'll notice lots of hands in the cookie jar... We are full stack, owning every piece of the plan up to custody. We don't outsource. We charge $8/pp/m to the employer, nothing to the participant. You can learn more at https://www.guideline.com https://www.guideline.com
- bradleyjg 11y agoTheir pricing looks very good. But very small companies may also want to look into SIMPLE IRAs. They are less flexible in terms of employer contribution options (basically 3% match to a max of $12.5k or 2% unconditional to a max of $5,300) and have lower employee contribution limits ($12.5k) but involve far less paperwork and tend to have considerably lower fees.
- nugget 11y agoGreat team, great product. Highly recommended.
- astrowilliam 11y agoI interviewed with these guys! I've spoken with one of the founders, Roger Lee, at length about their product and I have to say that they are amazing people with great vision. Even though I didn't get the gig, it's great to see them doing well! Good things happen to good people.
- tyh 11y agoRoger is a real smart guy. I know because I went to summer camp with him years ago.
- astrowilliam 11y agoHe's very smart, and a good dude. I'm happy to have had the opportunity to have him in my world for the brief time that we were talking. I could only imagine the camping shenanigans he got into!
- brobinson 11y agoAwesome team and product! Paul is a great guy. I was interviewing there, but sadly the position I was applying for was filled. :(