| 401k Excessive Fees Or Fears? |
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| Written by Gary Mitchell |
| Thursday, 17 September 2009 01:14 |
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On 6/19/2008 Bloomberg TV aired a three part series revealing "The Truth Behind Hidden Fees in 401k Plans."
On 6/19/2008 Bloomberg TV aired a three part series revealing "The Truth Behind Hidden Fees in 401k Plans." According to a survey conducted in 2007 of those who have 401k retirement accounts, 8 out of 10 people are completely unaware of the cost of their management fees. The fees are buried in fine print and so confusing, they may as well be written in a foreign language. As many a 17 different kinds of fees, according to the U.S.Department of Labor, can be charged to your account by plan managers. Shelf Space fees, Soft Dollars, 12b-1 fees, Finder fees, Surrender Charges, Wrap fees, and Revenue Sharing are fees that you may not have heard of, charged to your account. These are just a few of the fees charged by brokers or management to 401k retirement accounts. What you don't know can and does hurt you! 401k account savings should compound over a period of time to make a comfortable retirement nest egg. Most of us are unaware how much of our savings is offset by management fees. At 2%, over a period of time, as much as half of your savings can be eroded according to Ted Benna of Malvern Benefits Corporation. Edward Siedel- SEC Investment Management Division tells us that excessive 401k fees have become "epidemic". He has seen fees in excess of 3%-5% and tells us that fees this high can "kill a retirement nest egg!" More and more Americans will have to work in their Golden Years to make ends meet if 401k balances don't start climbing higher. As he so eloquently put it "pension plans are going the way of the 8 track tape." Financial institutions and insurance companies are not obligated to disclose management fees according to Burton G. Malkiel PhD of Princeton University. When they do it is so obscure that it is difficult to understand. Americans have about 3 trillion dollars in 401k plans so people should take notice and ask questions from their managers or brokers. People should be aware of the fact that 401k fees can make the difference between eating cat food or cordon blue in their retirement years. Unless laws governing disclosure rates change in the near future, there is not much you can do except ask questions. Think about starting a small online business by building a blog and doing the necessary things to bring traffic to your site. Consider not putting all your eggs in one basket. Pick something that you have experience and an interest in for a blog. In this way you can develop a niche and grow your small business over time. Building a small business online can be enjoyable and will offer the standard tax advantages for the costs associated with supporting this business at home. The actual start up costs can be minimal and you can build your blog or online business at your own pace. Don't put all your nest eggs in one basket! Ask your broker questions about your 401k management fees. Having a 401k retirement account with social security and a small business should help you offset receding assets in what should be your "Golden Years. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Here's where you can learn about a simple, proven, step-by-step system that can provide you with complete full retirement security income and success in a work at home internet marketing business. |