Re:Maybe Warren Buffett Is Warning Us About Something
by MrRadar on Wednesday August 28, 2019 @12:14PM
(#20821149)
They're often buried in the "expense ratio" of the funds offered. My company's 401k plan has exactly 3 funds with an expense ratio lower than 0.50%, all of them US domestic index funds. All of my bond and international options have ERs over 1.00% which is unacceptably high (I have most of my holdings of those asset classes in my other retirement accounts).
Re:Maybe Warren Buffett Is Warning Us About Something
by vonmoltke on Wednesday August 28, 2019 @01:30PM
(#20821990)
I don't really see how that counts as "401k fees", since those funds charge the same expense ratio to people who buy them on the open market. Investment choice, or lack thereof, is an issue that goes beyond fund fees.
Re:Maybe Warren Buffett Is Warning Us About Something
by whatok on Wednesday August 28, 2019 @01:40PM
(#20822088)
Some 401ks have access to different share classes that have (nearly) identical funds with different fee structures.
Re:Maybe Warren Buffett Is Warning Us About Something
by MrRadar on Wednesday August 28, 2019 @01:42PM
(#20822108)
This. The employees participating in the 401k plan don't choose which funds the plan includes, HR people (who are often not very well-versed in investing) do. Those HR people will choose these high-ER funds because the 401k provider usually offers discounts to their direct costs for having them, essentially shifting the cost of running the 401k plan from the employer to the employees.
I haven't seen these "high fees" in any of the five 401k plans across 4 providers that I have had since I started my career 17 years ago.