Search found 736 matches

by fcirullo
Thu Aug 26, 2010 10:47 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

Re: Who else saw the hearings on the real cost of 401(K) pla

Look at it this way. No one is going to sue the employer (plan sponsor) for being smart and matching the market's performance by selecting index funds and not attempting to beat the market in performance by selecting managed mutual funds. Oh I beg to differ. The chances of getting sued don't diminish one bit. Yet, what do experts who have never picked a mix of managed mutual funds or packaged products that beat the market recommend? I'm sure plenty of them have picked funds that have beat the market. However, beating the market is not the goal. And no one will complain if the employer hires a truly low cost recordkeeper and administrator. I think what you mean is "nobody SHOULD complain." But somebody will, I assure you. As I sai...
by fcirullo
Thu Aug 26, 2010 10:02 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

Re: Who else saw the hearings on the real cost of 401(K) pla

KyleAAA wrote:Legally? You have to trust the experts if you don't want to get sued. Doesn't matter if their advice works or not. They're experts.
Look at it this way. No one is going to sue the employer (plan sponsor) for being smart and matching the market's performance by selecting index funds and not attempting to beat the market in performance by selecting managed mutual funds.

Yet, what do experts who have never picked a mix of managed mutual funds or packaged products that beat the market recommend? They recommend mutual funds that are complicated and hard to monitor, right?

And no one will complain if the employer hires a truly low cost recordkeeper and administrator.

As I said, results matter!
by fcirullo
Thu Aug 26, 2010 9:47 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

Gerbil Wheel wrote:I can say that our management and fiduciary committee have set up a remarkably low-cost plan, investment line-up, recordkeeper, etc., dotting all the Is and crossing all the Ts from an ERISA standpoint...yet still the employees complain...a minority yes, but a vocal minority, enough to where it takes up a few hours of my time each week responding to the challenges and running it up the flagpole to legal where it simmers for weeks, while the employee continues to nag me, threatening to call the Department of Labor.
Specifically, what are the complaints?
by fcirullo
Thu Aug 26, 2010 9:22 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

Here's our fund lineup. I need to get better at lining up columns. Fund Name Symbol ER Vanguard Prime Money Market VMMXX 0.28% Vanguard Total Bond Mkt Index VBMFX 0.22% (F Fund proxy) Vanguard Short-Term Treasury VFISX 0.22% (approximate G Fund proxy) Vanguard Inflation-Protected Secs VIPSX 0.25% Vanguard Total Stock Market Index VTSMX 0.18% (C Fund proxy) Vanguard Small Cap Value Index VISVX 0.23% (approximate S Fund proxy) Vanguard FTSE All-Wld ex-US Idx VFWIX 0.40% (approximate I Fund proxy) Schwab Fdmtl Intl Sm Mid Co Idx SFILX 0.55% Vanguard Target Retirement 2005 VTOVX 0.18% (L Fund proxy) Vanguard Target Retirement 2010 VTENX 0.19% (L Fund proxy) Vanguard Target Retirement 2015 VTXVX 0.17% (L Fund proxy) Vanguard Target Retirement 2...
by fcirullo
Thu Aug 26, 2010 1:47 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

Wow, I feel lucky. My employer has its own mix of proprietary funds, run by more fund managers and administrators than you can shake a stick at. However, it has decent fund selection. They keep the index funds around 0.2% ER. I'm not happy with how they keep changing funds. Last year, they dumped a Vanguard SCV fund in favor of an actively managed fund that is essentially the same thing. This year, they changed their target date retirement funds from passive to active managed and doubled the ERs from around 0.2% to 0.4 % and higher (it's a range). What I'm happy about is that they recently have become a client of Financial Engines, Inc. , the online retirement planning company started by William F. Sharpe . I'm using the Online Advice prod...
by fcirullo
Thu Aug 26, 2010 1:39 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

As the 401(k) manager for a Fortune 500 company, I can say that our management and fiduciary committee have set up a remarkably low-cost plan, investment line-up, recordkeeper, etc., dotting all the Is and crossing all the Ts from an ERISA standpoint...yet still the employees complain...a minority yes, but a vocal minority, enough to where it takes up a few hours of my time each week responding to the challenges and running it up the flagpole to legal where it simmers for weeks, while the employee continues to nag me, threatening to call the Department of Labor. So if I may vent here...because I cannot say this at work... MEMORANDUM To: All Employees From: Gerbil Wheel Re: 401(k) Plan A number of employees have been complaining about the c...
by fcirullo
Thu Aug 26, 2010 1:27 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

Re: Who else saw the hearings on the real cost of 401(K) pla

It sounds perverse, but I think at least some employers would tend to heed the advice of a paid consultant or representative of a financial services company, rather than something from a book or a web forum ("you get what you pay for"), and there's some cover in the event of litigation ("Hey, I paid a lot for a professional's advice, and I followed it - you can't say I didn't breach my fiduciary duty"). The idea of this thread is to help employers and employees to get on the same page so that the plan they set up is truly low cost. Vendors will help you comply with the laws, rules, and regulations while setting up your plan, but according to Congress the experts have failed at showing employers how to set up a low cost ...
by fcirullo
Thu Aug 26, 2010 1:10 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

I invest in Vanguard bond funds in a brokerage account. Assuming ER's in the .25% range and an equal amount for trading costs inside funds (and admittedly may be much less than that in a Vanguard bond index fund) you get the .5%. I haven't actually tracked down the trading costs inside Vanguard bond funds as the information would not change anything anyway. Since the plan charges no costs against funds in the brokerage there are no administrative costs at all and there is no cost for the brokerage option, although originally there was a $75/yr. fee. $1000 must stay in funds in the regular plan. There are transaction costs for Vanguard funds in the brokerage, part of which pays back to the plan. A large transaction would cost $49.95, which ...
by fcirullo
Thu Aug 26, 2010 12:57 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

SSSS wrote:Considering how many participants pick their investments entirely at random, or go 100% money market, 45 basis points for a sane asset allocation & automatic rebalancing might be a small price to pay for some people compared to what they're costing themselves. Reading a book would be much cheaper, but a lot of people are just never going to do that.
You may be right. Here's the problem. It's obvious that most employers and employees are not on the same page, because they are not learning the important things that we are discussing on this thread. For instance, every employee and employer should be able to answer these two questions: 1. What's the mission? 2. How do we achieve the mission? See?
by fcirullo
Wed Aug 25, 2010 6:21 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

dbr wrote:I am getting by with total costs of about 0.3% in my 401K. That, however does not count transaction costs in the funds themselves. I suppose total friction is under 0.5%. That number seems unacceptably high, but I still voted "not too high" in the survey.

Note that if I were to withdraw 4%/year from my 401K as income this is a tax imposed by the financial services industry of 12.5%. I think that is outrageous, frankly. One could compare that to my current income tax burden, including state, of about 15%.
That's great! Would you mind sharing with us which funds you are using and who is doing your plan's recordkeeping and administration?
by fcirullo
Wed Aug 25, 2010 6:10 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

ryuns wrote:This is the same with me. I'm satisfied with "total costs" simply because I insulate myself by using the two Spartan funds they have available. After that, the costs skyrocket. If I'm with the company for another couple years, I'll have to bite the bullet and buy a 1% ER internat'l fund.
Would you mind telling us who does the plan's recordkeeping and administration and how much he or she charges, per year, per eligible employee? Thank you for your comments.
by fcirullo
Wed Aug 25, 2010 5:47 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

jeffp wrote:P.S. When I said that I built our plan, I should have added that I did so with the help of livesoft, ddb, dbr, leonard, and several other helpful Bogleheads. And also a good book written by Josh Itzoe. I was lucky to be in a position where I had the authority at my company to enact change, and also to have a community like this to help me.
You had an open mind and some great help, too--good for you!

You found this Web site, which means there is hope that many other employers will find it and have an open mind, too. Wouldn't that be great for both the employers and their employees! Setting up, managing, and monitoring a plan for the results you desire does not have to be time consuming or stressful, right?
by fcirullo
Wed Aug 25, 2010 5:30 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

Look at all of YOUR great comments! Wow!

I know that your knowledge and comments can help employers slash their plan's cost, and I hope that more employers will discover this thread.
by fcirullo
Wed Aug 25, 2010 5:17 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

That may be true, but consider the cost to the average participant : Sally Sixpack who works on the loading dock, and Joe Foodworker, who works in the company cafeteria. The cost is not just the expense ratio and fees. The cost includes what they would pay to get someone to tell them what "core mix of index funds" they should own and why. They also have to understand the "why". Guess what? They are not ever going to understand why they should select a "core mix of index funds". Never. No how. No way. They would just rather pick a TR or balanced fund and stop thinking about it. And they don't want it to lose any money. Can you say TIAA traditional? You are right, as usual! However, it's the employer's responsib...
by fcirullo
Wed Aug 25, 2010 5:07 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

SSSS wrote:Ways my 401k could save money:

1. Don't mail me a letter every time I change my contribution percentage. For personal reasons, I'm increasing it by 1% every two weeks and I really don't need to be reminded of what I just did.

2. Don't keep mailing me glossy brochures asking me to enroll in the 401k that I'm already enrolled in.
Great points!
by fcirullo
Wed Aug 25, 2010 4:50 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

We use Paychex as our TPA (also have payroll through them). Paychex's OFS platform is a pretty good open architecture platform. Paychex partners with a company called Guided Choice, which has a program that our employees may opt into. For about 45 bps/year (there's a dollar cap if your account is over 75k or so) GC will either manage your account for you using our available funds (including rebalancing, etc.) or simply provide advice that participants may implement themselves. That's if they don't know what to do and want a professional to do it for them. Is that what you were asking? Obviously if someone doesn't want to pay the 45 bps and wants to choose his or her own funds, we have a good selection of regular Vanguard index funds. I can...
by fcirullo
Wed Aug 25, 2010 3:58 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

jeffp wrote:I voted 'No.' Then again, I built my company's 401(k) plan.
I understand. It seems there are as many opinions on how to set up a plan as there are people, right?

However, results matter. For instance, compared to other plans is the cost of the plan's services truly low? And does the plan have a core mix of investments that will at least match the market's performance--long term? Long term means more than ten years. If the answer is "Yes" to both questions, the plan is optimal. Easy!
by fcirullo
Wed Aug 25, 2010 2:47 pm
Forum: Investing - Theory, News & General
Topic: Does efficient-market hypothesis justify passive investing?
Replies: 152
Views: 11977

Re: Does efficient-market hypothesis justify passive investi

Vanguard, Bogle in particular, and Malkiel have looked at the evidence comparing active to passive. So far, the evidence does not favor active management. It is always easy to pick out the few winning active managers after the fact. So far, no one has been able to figure out how to find those winning active managers before they posted winning performance. And if you think just pick one of the few winning active managers is a good way to go, remember that no one knows if those winning active managers will continue to outperform. Just like the disclaimer says: "Past performance is not a guaranty of future results." True! Every employer that offers a 401(k) or 403(b) plan needs to read what you said. If they understand it, they won'...
by fcirullo
Wed Aug 25, 2010 1:00 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

Who knows if there are any hidden fees and what they are. Great question! Rather than wasting time trying to uncover every hidden and camouflaged cost, the easiest and fastest way to know if your plan is optimal is to compare it to a plan that looks like this: 1. The plan's core mix of index funds cost not more than 0.07% to 0.25%, per year. 2. Recordkeeping and administration costs not more than $30.00, per year, per eligible employee. 3. The plan's Self-directed Brokerage Account option for employees who don't want to invest in index funds has low commissions on trades. Note: Any managed mutual funds or packaged products such as target-date funds and balanced funds that a plan has as a default option are likely to underperform a core mix...
by fcirullo
Wed Aug 25, 2010 12:32 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

NateW wrote:Yes, I have one of those craptacular 401ks as well. There are only three of us in the "company" I work for (a non-profit trade association). I have selected the least expensive funds option. I have the DISpleasere of paying at least 1.68% of plan assets for a Vanguard Target Date fund (it is branded by Transamerica Insurance Company). I may be paying even more than that. The 1.68% is what I see in print. Who knows if there are any hidden fees and what they are.
What's amazing to me is that this kind of retirement plan was created over twenty-five years ago, and employers still don't get it on cost! Thank you for your comments.
by fcirullo
Wed Aug 25, 2010 12:12 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

nimo956 wrote:This is exactly how it works with my company. Once I became eligible to enroll in the 401k, it was automatically setup to deduct 3% and put it in Vanguard's TR 2050 fund. I wonder how many people don't even increase it to 6% to get the full match. We have a VG rep come to the office every year to talk about the plan/planning for retirement, and I remember that the year I went only about 3 other people showed up!
Thank you for your comments. What was it that made you realize how important it is to save and invest your money? And would you mind sharing with us who your company uses for recordkeeping and adminstration?
by fcirullo
Wed Aug 25, 2010 12:05 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

This is the unfortunate truth. I changed my company's plan from a Merrill Lynch/BlackRock fund lineup to an all-index fund lineup, and since there was no logical way to map the funds one-to-one, I chose a participant default investment of Vanguard Balanced Index. Well, 3-4 months later, and HALF of our plan assets are in... Vanguard Balanced Index! As a 60/40 fund, it's not exactly the right risk profile for most of our employees, who are mostly in their 20's and 30's, but I have no doubt that they are better off in that than in whatever they were in before. And to be honest, most of our employees are probably better in 100% VBINX than trying to choose their own funds - that is, assuming they didn't do the smart and simple thing and pick a...
by fcirullo
Wed Aug 25, 2010 11:50 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

My wife has a craptacular 401(k) plan. She works for a small company. The owner himself does not even participate in the 401(k) plan. He is advised that the plan is a great plan by the folks he hired to set up the plan. At a recent company-wide 401(k) meeting, the plan provider/advisor spoke about how great the plan was and how great the funds were. He did not mention the 2+% annual fees. So who are employees supposed to believe: Somebody standing at the front of their conference room telling them that they have one of the best 401(k) plans in the world? Or some anonymous internet people who they have never heard of? Furthermore, there appear to be some so-called rating agencies that give the highest marks to high-fee plans like those prov...
by fcirullo
Wed Aug 25, 2010 11:38 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

Anything that will require employees to read and learn anything will not be beneficial. My experience is that only a small subset (say less than 5%) of plan participants care. Almost all the others need to be forced to use the plan, so they should have low-cost target retirement funds forced on them as in, "You must put X% into the plan and the default option is this TR fund based on your expected retirement age." That default option would have to be legally tenable, so that the fiduciaries are not sued. Once the default option is set, I think only about 5% of the plan participants would change from it. Your comments are so true. Few employees are able to act as an effective check and balance over their own money in the plan beca...
by fcirullo
Wed Aug 25, 2010 10:56 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

NAVigator wrote:While it would be an improvement over getting information from the salesman, I'm not sure it would work. The person going to the board of directors and recommending something "because they read it on the internet", is not going to convince most people, IMHO.

Jerry
Thank you for your comment. This happens when the plan's named fiduciary, which could be the board of directors, and the employees are not on the same page regarding what a low cost plan really looks like. However, when both know what a low cost plan looks like they want to hear each other out so that they can fix whatever is broken, which is the only way to go.
by fcirullo
Wed Aug 25, 2010 10:43 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

SpecialK22 wrote:I think one of the main reasons why an employer may have a high cost plan is because the plan administrator makes it cost effective for the employer. In other words, most of the costs are transferred from the employer to the employee in the form of a plan with higher expense ratios and fees. So the plan actually may be low cost from the employer's perspective.
Thank you for your comment. It's true, employers do transfer the cost of a plan to the employees (participants). And most employers won't even consider the possibility that the plan they set up is too expensive to keep, as is.
by fcirullo
Wed Aug 25, 2010 10:35 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

leo383 wrote: This is pretty much how it worked at my company, too, and it was a bank trust department that ran retirement plans for other companies!
Thank you for your comment. Are you as amazed as I am that so few employees are interested in being a good watchdog over their own retirement money?
by fcirullo
Wed Aug 25, 2010 10:20 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

james22 wrote:Comparative ranking helps.

http://www.brightscope.com/
Thank you for the link. BrightScope is a good resource for comparing six components of a plan.

What matters most is the long term performance of each one the mutual funds in the plan's core mix of investments. After that, what matters most is the total cost of services such as recordkeeping and administration, investment advice, plan consulting, and education. After that, company generosity with a matching contribution is great but a company that can't afford a match can still set up a truly low cost plan, right?
by fcirullo
Wed Aug 25, 2010 2:13 am
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

Thank you for your excellent comments Jerry, Livesoft, and Nimo956!

I get what you are saying. If the employer does not know that the company's plan is too expensive to keep, it's because no one, not even Congress, has been able to convince him or her to switch to a lower cost plan.

And you feel it's likely that putting guidelines for setting up a low cost plan on this thread will not convince an employer to improve his or her plan, either.

Unfortunately, most employers still follow the herd and many employees are unnecessarily wasting their hard earned money in the high cost plans that have investments that underperform index funds. It's a double whammy!
by fcirullo
Tue Aug 24, 2010 5:16 pm
Forum: Personal Finance (Not Investing)
Topic: Setting up a 401(K) plan
Replies: 293
Views: 72070

Setting up a 401(K) plan

Updated on February 12, 2013 Is your 401(k) or 403(b) plan in compliance with the final rule Reasonable Contract or Arrangement Under Section 408(b)(2)--Fee Disclosure? By now, employers should know every cost that the company pays for the plan. Also, employees should know every cost that they pay. On or before November 14, 2012, service providers should have given employers a fee disclosure statement. In turn, employers should have given employees a disclosure statement that shows the fees that employees pay for the plan. In addition to the fee disclosure statement, employees are receiving quarterly statements that show the fees that they pay. -- Done right! For step by step instructions on how to set up your 401(k) or 403(b) plan to compl...
by fcirullo
Sun Aug 22, 2010 9:23 am
Forum: Personal Investments
Topic: financial advisor
Replies: 13
Views: 2396

Financial advisor

Note: The more complicated you make your 401(k) or 403(b) plan, the harder it will be to get it right when monitoring the plan's vendors and investments for the results you desire. You want to at least match a benchmark for total cost and investment performance. I'm glad you started this conversation. It's an important conversation that every employer (plan sponsor) should have with every employee (participant.) That way, everyone will be on the same page regarding how to really set up a truly low cost 401(k) or 403(b) plan. Fact: The employer is expected to be prudent regarding hiring the plan's vendors (service providers) and selecting the plan's mix of investments. Otherwise, the employer can and will be held liable for a breach of fidu...
by fcirullo
Thu Aug 12, 2010 4:05 pm
Forum: Investing - Theory, News & General
Topic: Best small company 401k plans
Replies: 7
Views: 1985

Keep it simple. For instance, use these guidelines... Step 1 - Select a core mix of the lowest cost index funds you can get: Large-cap blend, mid-cap blend, small-cap blend, large-cap foreign blend, money market mutual fund, short-term bond fund, intermediate-term bond fund, long-term bond fund. Step 2 - Hire a recordkeeper and admistrator that can provide the index funds that you selected. Caution: Pay not more than $30.00, per year, per eligible employee with no hidden and camouflaged costs. Step 3 - Set up low cost self-directed accounts for participants (employees) who have never picked managed mutual funds that beat index funds in performance but want to try it anyway. That way, going forward, you will comply with any new rules or regu...
by fcirullo
Thu Jun 10, 2010 1:18 pm
Forum: Personal Investments
Topic: Contradiction in advice to DCA vs. Lump Sum?
Replies: 64
Views: 6295

You asked us What should Bob reply to Fred's question?

Bob should be honest with Fred and say this...

"Fred, do whatever you are comfortable with, not what I would do. Why? The fatal flaw in every asset-allocation, rebalancing, and dollar-cost-averaging program (no matter how sophisticated it may appear to be) is this: Going forward, no one can predict which asset-classes will outperform all of the others. Therefore, pick a model that you are comfortable with, be a disciplined investor, and invest for the long term."

Best wishes,

Frank R. Cirullo
by fcirullo
Fri Apr 30, 2010 9:56 pm
Forum: Personal Investments
Topic: 403 B Portfolio Advice (Fidelity)
Replies: 13
Views: 4500

Marc, Thank you for your comments about me. However, most of them are not true. 1. Please check my profile. Total posts: 2 (This is my 3rd post). 2. What I wrote is not "boilerplate". I wrote one post to answer a question about a 401(k) plan. The question asked about 403(b) plans was a similar situation, so it made sense to give the exact same answer. 3. Regarding the generic information that I gave, any employee or employer can apply that very same information and cut their plan's cost by up to 90%. They cannot fail to save money, earn a market return less their cost for the plan, save time, and have less stress, too. Easy! 4. Giving people specific advice on which plan to buy, which fund to invest in, and how to allocate their a...
by fcirullo
Fri Apr 30, 2010 10:51 am
Forum: Personal Investments
Topic: 403 B Portfolio Advice (Fidelity)
Replies: 13
Views: 4500

This is how I answered the same question for someone who had a 401(k) plan. By the way, these days 403(b) plans are set up much like a 401(k) plan. The idea is to keep your 401(k) simple and low cost by investing in a diversified core mix of investments that will at least match the market's performance. Easy! That way you can immediately have more money, more time, and less stress. 1. Recordkeeping and Administration: Pay not more than the benchmark of $30.00, per year, per eligible employee. Remember to uncover and eliminate all hidden or camouflaged costs that your plan and its investments have. 2. Investments: Index funds are designed to match the market's performance less your cost. Pay not more than 0.07% to 0.25% per year for index fu...
by fcirullo
Fri Apr 30, 2010 10:41 am
Forum: Personal Investments
Topic: Please help me allocate my 401k (25 y/o)
Replies: 23
Views: 4561

The idea is to keep your 401(k) simple and low cost by investing in a diversified core mix of investments that will at least match the market's performance. Easy! That way you can immediately have more money, more time, and less stress. 1. Recordkeeping and Administration: Pay not more than the benchmark of $30.00, per year, per eligible employee. Remember to uncover and eliminate all hidden or camouflaged costs that your plan and its investments have. 2. Investments: Index funds are designed to match the market's performance less your cost. Pay not more than 0.07% to 0.25% per year for index funds. 3. Asset allocation: What does a core mix of mutual funds look like? Like this: Large-cap blend, mid-cap blend, small-cap blend, foreign large-...