- 02/12/2016Interesting piece - and shows how you never know what some employers motives are.
Is your employer using your own 401(k) plan to rip you off?Is your employer using your own 401(k) plan to rip you off?www.yahoo.com Wells Fargo isn't the only U.S. firm that's profited illegally off its employees. Here's how to check whether your boss is self-dealing at your...
Comments05/12/2016 #28 Jared WieseThis section was buried in the second half of the article:
SO WHAT CAN YOU DO IF YOUR EMPLOYER'S 401(K) PLAN STINKS?
"First, contact your employer and point out the problem(s). Your employer has a fiduciary responsibility to offer a plan that is in your best interest — not its own. If it doesn't remedy the situation, not only will it have dissatisfied employees, but could find itself in a lawsuit or in trouble with regulators, who can be very responsive to anonymous employee complaints.
Second, if your 401(k) plan offers in-service withdrawals (some plans allow this), transfer however much the plan will allow into an IRA, where you'll have full control of your funds.
Third, see if it makes sense for you to reduce your 401(k) deposits to the level that will provide a full employer match (get that free money), and then direct the remainder of your retirement savings into a Roth IRA (limited to $5,500 if you are under age 50, and $6,500 if age 50 or older).
Finally, petition your congressman or senator to broaden your retirement savings beyond your employer. The only thing that prevents you from saving in an IRA of your choosing versus being stuck with your employer's options is, I'm sorry to say, our outdated legacy tax laws."05/12/2016 #27 Jared WieseNo, I don't work for Robbins or AmericasBest401k, or even use them. Yes, I tried with my company, but was told by management that they had already fulfilled their DOL duty and moved to a better plan. Hogwash! At least I tried...
The business owner (aka plan sponsor) is liable for their 401k choices! Increasingly, employees are suing employers for not taking the steps to eliminate excessive fees. The DOL is also out in full force in the matter."
"Among the key points that HR plan managers should keep in mind:
• The employer and any board, management or staff committee involved in decision-making for the plan are already fiduciaries, obligating them to adhere to participants’ best interests when selecting and monitoring plan investments and service providers—and subjecting them to potential liability if they do not.
• Certain financial advisors, including broker-dealers, insurance agents and mutual-fund firm representatives, generally have not been subject to liability under the fiduciary standard.
• Under the new rule, nearly all the types of advisors that a plan would rely on to provide investment advice to plan sponsors and plan participants will now be held to the fiduciary standard."
Check out my post for more info on index funds and investing:
https://www.bebee.com/producer/@jaredwiese/how-to-invest-better-and-safer-than-warren-buffett05/12/2016 #26 Jared Wiese"funds offered in your 401(k) are selected based on the investment firm’s willingness to kick back some of the fees they make off of you. In short, the funds offered are chosen based on how they benefit the 401(k) provider, not you.
So how much does the limited selection of funds really affect you? Aren’t all funds basically the same? That would be a resounding 'NO.' Funds vary greatly in both their return and the fees that they charge, so the selection of funds could make the difference between a comfortable retirement and running out of money when you need it most.
This conflicted advice is costing Americans $17 billion dollars a year, according to a report (pdf) earlier this year from the White House Council of Economic Advisors. You know now how 1% in fees can cost you 10 years of retirement income, so how do you select funds that will return the maximum performance at the lowest cost?
Warren Buffett gave us all the answer in a letter to his shareholders:
'Most investors, both institutional and individual, will find that the best way to own common stocks (shares) is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after the fees and expenses) of the great majority of investment professionals.'
Essentially, the answer is indexing."
(more...)05/12/2016 #25 Jared WieseMy real-life example:
A Vanguard S&P 500 index fund has an expense between 0.05 and 0.17%, depending on share class. Not too bad, right?! Many funds charge closer to 1% and that does not even include additional "plan expenses", easily bringing what you pay from 1-3% in total fees.
When I first started looking into my company's plan, they had 4 funds with the S&P 500 as a benchmark. So, for the exact same fund and performance, I was paying from .32% (6x more than 0.05%) to 0.51% (10x more!). After I pointed this out, they agreed to get a Vanguard fund. You guessed it, at the 0.17% - still 3x too much. That was just one example, but with THE fund Warren Buffett says is all you need. (More on that later.)
The best 401(k) company I've seen is AmericasBest401k. Google it! They act as a fund company AND a fiduciary. That means they are on the hook for their investment advice and can charge rock-bottom fees. Their "all-in" cost is .75%. Like I said above, most companies think they are doing well if they charge their employees 1-3% in fees. "Come on, what's a little 1%", you ask? Well, each 1% in fees takes 10 years off your retirement money!...
"For 30 years, the 401(k) industry didn’t have to tell anybody how much they were charging! Now that they must disclose, 401(k) providers bury their fees deep within long and difficult to understand documents, effectively keeping their customers in the dark. But what the majority of Americans don’t realize is that an increase in 1% in fees will cost you 10 years in retirement income!"
- 07/12/2016Stockomendation Hits Major Milestone - now tracking the performance over 20,000 UK stock tips! Over 470 new tips per month & growing fast! www.stockomendation.com
- 30/11/2016Top 5 stock tips this week. Join @Stockomendation (free) to receive tips & alerts about the stocks that interest you.
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- Producer25/10/20163 Things to Consider as a First-Time Home BuyerBuying a home can be daunting, especially if it's your first time. There is a lot of paperwork (enough to give you a headache), and there are many things to keep in mind when looking for the right place. Before you sign your life away, there are a...
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- 10/10/2016Robin Powell on LinkedIn shared an update/conversation (www.linkedin.com/hp/update/6190937869566164993):
"The 0.00% fund fee has finally arrived. How about *negative* fund fees? Why not, says Jason Zweig"...The ETF With the 0.00% Feeblogs.wsj.com This past week, BlackRock, the world’s largest asset manager, cut management fees on some of its iShares exchange-traded funds to as low as 0.04%. But why stop there? And why stop at...
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"Jack Bogle may or may not be right when he says we're heading for an era of lower returns. If he is, it'll be all the more important to keep costs low"
I would agree!
by Christine Benz at Morningstar.Bogle Forecasts Low Stock and Bond Market Returns Warning of 'much lower market returns' ahead, Vanguard founder Jack Bogle urges investors to seek low-cost investment products. For all Morningstar videos:...
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- Producer18/09/201610 Rules to Invest Your Money... OR 1 Word: INDEXES I've summarized one of the best articles I've seen on the rules and mindset of #investing. It comes from Kathleen Elkins on http://www.businessinsider.com In summary: Only invest money you won't need for a long timeDon't time your...
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- 01/09/2016Submit your stock tips throughout September to win a copy of 'The Art of Execution' by Lee Freeman-Shor. Competition starts Mon 5th Sept. Sign up free atFind Stock Tips with Stockomendationstockomendation.com View 1000s of stock tips from the UK's leading sources all in one place, updated daily with tip performance...
- Producer23/08/2016What to Know About Your First Property FlipIf you are flipping your first property, you should know that it is not as easy as it may look on television. Typically, those who have their own shows are experts who have many years either buying and selling homes for a profit or who have a lot of...
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Comments13/04/2016 #2 Mike RestivoMacro interest and credit risk/hi-yield bond risks are ever present, witness JP Morgan (-20% YtY) et alia earnings reports of today. The global effects maintain a hold over even from 2008 bailout. Not old at all in this bear market. Perspectives will of course vary necessarily for traders or long term investors.
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