expenses in a 401k

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dbapaddy
Posts: 30
Joined: Tue Aug 14, 2018 1:52 pm

expenses in a 401k

Post by dbapaddy » Wed Sep 12, 2018 7:31 pm

I have a 401K through work, which includes Vanguard 500 Index Fund Admiral Shares as an option.

Listed in their document for the Vanguard 500 Index Fund (VFIAX) are the following expense details:

Gross Prosp Exp Ratio: 0.04% of fund assets
Net Prosp Exp Ratio : 0.04% of fund assets
Management Fee : 0.03%
Miscellaneous Fee(s) : 0.01%

How much am I actually paying in expenses via VOYA versus what Vanguard would charge me if I invested directly?

ExitStageLeft
Posts: 982
Joined: Sat Jan 20, 2018 4:02 pm

Re: expenses in a 401k

Post by ExitStageLeft » Wed Sep 12, 2018 7:45 pm

I wonder if these things aren't made on purpose to be hard to understand. My guess is 0.08% of assets, twice the retail price but a very reasonable surcharge for a 401k plan.

dbapaddy
Posts: 30
Joined: Tue Aug 14, 2018 1:52 pm

Re: expenses in a 401k

Post by dbapaddy » Wed Sep 12, 2018 7:56 pm

ExitStageLeft wrote:
Wed Sep 12, 2018 7:45 pm
I wonder if these things aren't made on purpose to be hard to understand. My guess is 0.08% of assets, twice the retail price but a very reasonable surcharge for a 401k plan.
agreed to the complexity...even for somewhat savvy people.

CRTR
Posts: 150
Joined: Sat Apr 11, 2015 1:15 pm

Re: expenses in a 401k

Post by CRTR » Thu Sep 13, 2018 12:07 pm

That's a nice 401k you have!!

Ironically, you are paying less in your 401k than I do in a Vanguard i401k. In a Vanguard i401k, you are limited to Investor Class Shares. The ER of of VFINX is 0.14% as opposed to the 0.08% you're paying.

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Earl Lemongrab
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Joined: Tue Jun 10, 2014 1:14 am

Re: expenses in a 401k

Post by Earl Lemongrab » Thu Sep 13, 2018 2:03 pm

ExitStageLeft wrote:
Wed Sep 12, 2018 7:45 pm
I wonder if these things aren't made on purpose to be hard to understand. My guess is 0.08% of assets, twice the retail price but a very reasonable surcharge for a 401k plan.
I disagree. The second part shows the breakdown of the .04% ER. That's how Megacorp does it. There's a base ER from the fund (in our case a CIT from SSG) and then the fund expenses for recordkeeping etc. That gives you the net ER.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

dbapaddy
Posts: 30
Joined: Tue Aug 14, 2018 1:52 pm

Re: expenses in a 401k

Post by dbapaddy » Thu Sep 13, 2018 3:42 pm

Earl Lemongrab wrote:
Thu Sep 13, 2018 2:03 pm
ExitStageLeft wrote:
Wed Sep 12, 2018 7:45 pm
I wonder if these things aren't made on purpose to be hard to understand. My guess is 0.08% of assets, twice the retail price but a very reasonable surcharge for a 401k plan.
I disagree. The second part shows the breakdown of the .04% ER. That's how Megacorp does it. There's a base ER from the fund (in our case a CIT from SSG) and then the fund expenses for recordkeeping etc. That gives you the net ER.
so am I paying .04?

MichCPA
Posts: 301
Joined: Fri Jul 06, 2018 9:06 pm

Re: expenses in a 401k

Post by MichCPA » Thu Sep 13, 2018 3:45 pm

dbapaddy wrote:
Thu Sep 13, 2018 3:42 pm
Earl Lemongrab wrote:
Thu Sep 13, 2018 2:03 pm
ExitStageLeft wrote:
Wed Sep 12, 2018 7:45 pm
I wonder if these things aren't made on purpose to be hard to understand. My guess is 0.08% of assets, twice the retail price but a very reasonable surcharge for a 401k plan.
I disagree. The second part shows the breakdown of the .04% ER. That's how Megacorp does it. There's a base ER from the fund (in our case a CIT from SSG) and then the fund expenses for recordkeeping etc. That gives you the net ER.
so am I paying .04?
Yes, Earl is correct see page 1 of the VFIAX summary prospectus (pg 3 of pdf).

https://www.vanguard.com/pub/Pdf/p040.pdf

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