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They're often buried in the "expense ratio" of the funds offered. My company's 401k plan has exactly 3 funds with an expense ratio lower than 0.50%, all of them
by MrRadar 7y ago
They're often buried in the "expense ratio" of the funds offered. My company's 401k plan has exactly 3 funds with an expense ratio lower than 0.50%, all of them US domestic index funds. All of my bond and international options have ERs over 1.00% which is unacceptably high (I have most of my holdings of those asset classes in my other retirement accounts).
- vonmoltke 7y agoI don't really see how that counts as "401k fees", since those funds charge the same expense ratio to people who buy them on the open market. Investment choice, or lack thereof, is an issue that goes beyond fund fees.
- whatok 7y agoSome 401ks have access to different share classes that have (nearly) identical funds with different fee structures.
- MrRadar 7y agoThis. The employees participating in the 401k plan don't choose which funds the plan includes, HR people (who are often not very well-versed in investing) do. Those HR people will choose these high-ER funds because the 401k provider usually offers discounts to their direct costs for having them, essentially shifting the cost of running the 401k plan from the employer to the employees.