When investing for retirement, investment fees should not total a significant portion of your retirement portfolio. Fees assessed on qualified retirement plans add up, especially for plans for smaller employers. The 401k and the Individual Retirement Account (IRA) have become the retirement savings vehicles of choice, but these accounts all charge fees or other expenses that eat into returns.
Part of the fiduciary responsibility of plan administrators is to ensure that fees charged on these plans are reasonable, yet not excessive. However, investors are often not aware of the fees that are incurred by plan administrators. While many are tempted by contribution matches offered by an employer and the inherent tax benefits associated with qualified plans, the process of investing for retirement should not be too costly an endeavor.
Retirement should not become a pipe dream as the result of over-costly management fees. Although there are no one-size-fits-all answers, there is no question that at some point, most people will want to retire. Variations exist in the situation of the investor, which range from the structure of the investor's company retirement plan, to their particular tax situation, and their time horizon, meaning that a certain plan might make sense for one individual but may not for another.
The Advice Angle
It's one thing to find a place for your 401k rollover to stay, but what is your plan for these assets? How will you address the questions of asset allocation, investment strategy, investment research, the inevitable volatility of financial markets and how these assets fit into your general plans for retirement. A plan administrator can pride themselves on being a low-cost solution, but what is the investor giving up by being too fixated on a low price?
Nowadays, a retirement plan has to provide more than custodianship and recordkeeping. It has to offer services and advice that help investors (and their advisors) achieve their goals. Importantly, the services should include the education and expansion of the knowledge of the investors. But these services should not come at too high a cost. Plans should offer reasonably priced, high quality services that help investors achieve their goals for retirement.
Get the Best Bang for Your Buck(s)
Simply put, you have a set amount of time before you retire. Your retirement should not be jeopardized due to exorbitant 401k fees. Investors should get the best bang for their buck, and to get the best bang for your bucks, a plan should have a host of investment options for your retirement assets that combine high impact strategies with low-cost management.
For your retirement assets, have a better plan for better investing. With 4Thought Financial Group’s SMA platform, investors can get a quality retirement platform that helps them save for retirement, not just eat away at it.