Is Your 401(k) Ripping You Off?

Approximately 51 million Americans have invested an estimated $3.5 trillion in 401(k) plans, according to the Investment Company Institute.  If you’re one of them, you’re probably being ripped off, big time.

Did you know that Landmark can provide an effective, easy-to-use, low-cost 401(k) plan?  Recommend us to your HR manager for a review of your current plan.

A February 2014 paper by Ian Ayres and Quinn Curtis, “Beyond Diversification: The Pervasive Problem of Excessive Fees and Dominated Funds in 401(k) Plans,” provided sobering advice for plan participants. The study looked at more than 3,000 401(k) plans with more than $120 billion in assets. It found that fees were so high in 16 percent of the plans that, for young employees, these fees consumed the tax benefit of investing in a 401(k) plan.

The study also found that roughly 52 percent of the plans had “dominated funds,” defined either as funds that were more expensive than comparable funds in the plan, or funds that were unattractive options in which no prudent participant should invest.