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It's not quite clear what exactly they want. From the article: > As of now, there’s nothing to prevent 401(k) plans from adding private equity investments if t
by ryandrake 2y ago
It's not quite clear what exactly they want. From the article:
> As of now, there’s nothing to prevent 401(k) plans from adding private equity investments if they feel the benefits outweigh the risks.
401(k) plan administrators already can offer this crap, but nobody's asking for it, and most of them, so far, are not stupid enough to default retirement savers into them. And even if P.E. do manage to muscle/bribe their way into a 401(k) administrator's offerings, nothing stops me, as an investor, from allocating my assets into public-markets-only funds.
My employer's 401(k) administrator could choose to add all sorts of crazy funds to their menu--I'm not choosing any of them. If I had more money, maybe I would even try them. Something like <1% into a crazy private equity black hole might make sense if I was already set for retirement, and could afford to lose it.
- bluGill 2y agoSo long as you get a choice. I've been in 401k where the indexfund had a high expense ratio tripple the vanguard equivelent and the other options were worse. I've at least always had an index option - many don't even get that option.
- s1artibartfast 2y agoIsnt that when you would want to move your 401k funds into an self directed IRA?
- bluGill 2y agoAs soon as I left I did. So law doesn't allow moving a 401k like that though and you can but far more into a 401k than ira so you are often stuck.
- s1artibartfast 2y agoI cant quite parse what you said. My understanding is that the law does allow rollovers with no limit. The bottleneck, as I understand it, is contribution limits for people who dont have a 401k to start with. https://www.irs.gov/pub/irs-tege/rollover_chart.pdf https://www.irs.gov/pub/irs-tege/rollover_chart.pdf
- bluGill 2y agoThe law may have changed but at least then you could only do a rollover if you didn't work for the company.
- ryandrake 2y agoI guess I've been lucky in that my employers have tended to have pretty decent 401(k) administrators. My current employer's 401(k) is through Vanguard, which as we all know offers index funds with absolutely trivial (0.01%) fees.
- asdffdasy 2y agothey are talking about rules specifically set for some class retirement funds, which some 401k adopt. Those were set in place most to make sure syndicate run funds were playing nice. nothing to do with your techie 401k were anything resembling even the word syndicate won't apply.