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how does that compare to other fees all in? Obviously the employee cost is really good, but is the typical 1-2% employee fee company just passing that $8 onto
by idunno246 10y ago
how does that compare to other fees all in? Obviously the employee cost is really good, but is the typical 1-2% employee fee company just passing that $8 onto you? Especially in lower paying companies, that could add up
- ucaetano 10y ago$8/month = $56/year, divided by Vanguard's 0.0018 equals $31k. So if the employee has in his 401k: - $20k, the equivalent fee is 0.41% - $50k, the equivalent fee is 0.24% - $120k, the equivalent fee is 0.18% - $200k, the equivalent fee is 0.16% - $1M, the equivalent fee is 0.136%
- samb1729 10y agoCould you elaborate on how you got those numbers? You lost me at $56 but I don't understand your percentages either so perhaps I'm missing something here.
- ucaetano 10y agoPercentage = [(56/Capital) + 0.13%] 56 = cost to employer Capital = how much the employer has in the 401k 0.13% = average fund fee So if Capital = 200k Percentage = [56/200k + 0.13%] = 0.028% + 0.13% = 0.16% My guess is that they're focusing on new plans, not allowing rollover from previous plans and not allowing employees to keep the plan after they leave the company. In this situation they're able to have mostly savers with low or very low balances, and they charge on average higher fees than Vanguard and others.
- thedufer 10y ago8 * 12 is 96, not 56.
- ucaetano 10y agoHa, good catch, a typo and lack of sleep propagated through the numbers :)
- mercutio2 10y ago$8/month = $96/year, not $56.
- ucaetano 10y agoCorrecting myself, it's $96, not $56. That bumps up the fees a bit. Sadly, too late to edit it.