fbpx
U

Are 401k Fees Robbing you of your Retirement?

March 12, 2007

There is a storm of concern that has been building for quite some time, and it is finally getting the attention that it deserves…. 401K FEES:

CNNMoney.com “Lawmakers to take close look at hidden 401(k) fees”

US Deprtment of Labor “A Look at 401(k) Plan Fees”

MarketWatch “More fee disclosure could save 401(k) owners money, Congress told”

As I have discussed in past Chaos Topics there are many 401ks that have outrageous fees and limited investment options. This is very troubling because pensions are all but extinct, and most of us are relying on 401ks and 403bs to fund our future retirement.

To get an idea of how much 401ks have grown consider this figure. In 2005 there were roughly 47 million individuals participating in a 401k. Compare that to 1984 when there were only 7.5 million participants.

According to the CNNMoney.com article over 80% of 401(k) investors are not aware of how much they pay in fees. In this same article they site that excessive fees have penalized account balances by an average of 15% over the past 20 years.

The scary part about all of this is that most employers do not realize that their bad retirement investments could be a ticking time bomb. In the Department of Labor piece titled “A Look At 401(k) Plan fees” the following statement is made:
“You should be aware that your employer also has a specific obligation to consider the fees and expenses by your plan. ERISA requires employers to follow certain rules in managing 401(k) plans. Employers are held to a high standard of care and diligence and must discharge their duties solely in the interest of the plan participants and their beneficiaries. Among other things, this means that employers must:

* Establish a prudent process for selecting investment alternatives and service providers
* Ensure that fees paid to service providers and other expenses of the plan are reasonable in light of the level and quality of services provided
* Select investment alternatives that are prudent and adequately diversified
* Monitor investment alternatives and service providers once selected to see that they continue to be appropriate choices

NOW HOW MANY OF YOU THAT LISTEN TO MY SHOW WHO ARE DECISION MAKERS DO EVERYTHING LISTED ON THE DEPT. OF LABOR LIST? Consider this a warning to get your act together. The government knows that they have blown it with Social Security and they recognize that pensions are all but gone. Our government is scared about where we will be as a country in 10 to 20 years as individuals reach retirement age and they do not have adequate assets to cover retirement living expenses and healthcare.

Listen to the Podcast for details on the following:
*WHAT ARE 401K PLAN FEES AND WHO PAYS FOR THEM?
*SOME COMMON INVESTMENTS AND RELATED FEES
*WHERE CAN I GET INFORMATION ABOUT THE FEES AND EXPENSES CHARGED TO MY 401K PLAN ACCOUNT?

As many of you are aware I do this podcast as a hobby with minimal income expectations, but sometimes the hobby provides an opportunity for my business and I would be a fool not to use my audience to grow the business. My firm (Preston & Cleveland Wealth Management, LLC) provides 401k consulting services for plans with at least $1 Million in Plan Assets. If you are a decision maker at your company and have questions about the fees that you are paying please feel free to contact me directly at JBP@Preston-Cleveland.com or call (770) 898-4235. It could be a call that could save you thousands of dollars in plan fees, help you meet the government’s new Fiduciary requirements, and allow you and your employees access to funds and diversification that can steady the future of your retirement options.

For all those that subscribed to the “Wealth Report” Newsletter… We will be mailing them out in the next 3-4 days. Enjoy and let me know your thoughts.

FILED UNDER: Podcasts
TAGGED WITH:

Most Recent Episodes

Dave Ramsey vs. The Money Guy: Which Strategy is The Best?

Dave Ramsey has an incredible legacy of helping folks get out of debt and take control of their financial lives. We agree on a lot of things, but there are a few points of contrast. In this episode, we’ll discuss differences between The Money Guy Show and Dave Ramsey...

Top 4 Financial Mistakes We Saw This Year! (2022)

We saw some wild financial mistakes this year during the bear market. From making extreme changes to portfolio allocation, chasing the hot dot, and using too much leverage, we’ll talk about some of the biggest financial mistakes we saw in 2022 in this episode.   In...

How Millionaires Build Wealth! (With Dave Ramsey)

Join us for a very special episode as we welcome personal finance radio host and influencer Dave Ramsey to The Money Guy Show! There’s so much misinformation out there about building wealth. We had the pleasure of having a great conversation about how millionaires...

Do These 4 Things with Your Finances BEFORE 2023!

There are unique financial opportunities available at the end of the year - especially this year with the market down. In this episode, we’ll talk about what you need to do with your money BEFORE 2023! In this episode, you'll learn: What you need to do with your money...

How to Win When the Financial World is Burning!

Lately it’s felt like the financial world is in chaos, with rising interest rates, a falling stock market, and high inflation. Let’s talk about how to focus on what you can control and how to minimize the time spent worrying about what you can’t control. In this...

Financial Advisors React to RIDICULOUS Money Advice on TikTok!

The most powerful time to get serious about building wealth is when you’re young. So, what is the younger generation learning? Financial Advice (good and bad) is being produced in massive rates across online platforms and TikTok is the new frontier. Is there good...

Loss Harvesting: Why Wealthy People Love It (And You Should Too!)

Tax-loss harvesting: what is it and should you be doing it? In this episode, we’ll cover everything you need to know about tax-loss harvesting, including whether it makes sense for you, how much it could save you in taxes, and how to eliminate the downside of loss...

The Market is Crashing! (Where Should You Put Your Money?)

The stock market has not had a great year so far. You might be asking yourself, “Since the market is crashing, where should I put my money now?” In this episode, we’ll discuss how to invest when the market is dropping and how to make the most of your money. In this...

Will Rising Interest Rates Tank the Economy?!

The Federal Reserve is raising interest rates to combat inflation, and many are concerned about how it will affect the economy. In this episode, we’ll discuss what rising interest rates means for your wallet and how to make the best of it. In this episode, you'll...

How to Be Wealthy By Age! (Can You Catch Up?)

How much does it take for you to meet your retirement goals by age, and what are some common traps your peers fall into? Learn more about how to be wealthy, mistakes to avoid, and exactly what a little extra saving can do for your retirement income. In this episode,...