401k Fees and Rollover Options
These fees could erode your retirement savings as much as 30% over time
Understanding the fees associated with your retirement accounts is very difficult. But, if you don’t know or understand how much you’re paying in fees associated with different investment options, how can you know if you’re overpaying for certain funds and limiting retirement balances from increasing more fully? Phyllis Borgi, the assistant secretary of labor for employee benefits security said that she was troubled by the complex fee disclosure format that some companies have put out.
Some companies have tried to hide, confuse, or be very non-specific in their disclosure of these fees.
The US department of labor reports 401k accounts typically charge fees of 1–2% for administration and management fees. These fees are deducted from your retirement savings every year on the full value of your account even if your account loses value. Fees of 1-2% may seem trivial, but over 20-30 years – even at just 1% – this means 20-30% less money at retirement, and 20-30% less income at retirement. This could cost you hundreds of dollars each month for the rest of your life.
A 401k rollover to a self-directed IRA may be an option for you, even if you are still employed with the company. If you are aged 59½ or older and looking to keep your retirement savings in a safe and secure, contractually guaranteed account, a fixed indexed annuity could be right for you.
Watch this video for more information on the fees and rollover options associated with 401k plans.
The US Security and Exchange Commission reported that $200 Billion have been deposited into Fixed Indexed Annuities. Fixed indexed annuities are excellent retirement and estate planning tools. Your retirement money cannot be put at risk like traditional retirement accounts. However, it is important not to group all annuities into the same category. Variable Annuities are invested in the stock market and are exposed to the ups and downs of the market and can result in a loss of your retirement funds.
A fixed indexed annuity may be a good choice if you want the opportunity for accumulation, but do not want to risk losing money in the market. We invite you to contact us to explore how Fixed Indexed Annuities can help you to grow and protect your retirement savings.