On This Episode
Your 401k can be your most powerful retirement savings tool, but it’s not perfect. We’ll explain some of the weaknesses you should be aware of with your 401k.
On today’s Saving With Silverman podcast, Mark Silverman CFP® explains why your 401k is far from perfect as a retirement savings tool. This also applies to your 403b, TSP or 457 plans.
“Nothing’s for free. Even if you don’t see the fee, it doesn’t mean it’s not being charged,” said Mark.
There are so many different fees out there, that sometimes your company’s HR department will give you a range, such as 2% to 4%, instead of a specific number.
“It’s really hard to get an exact number of what the plan’s really costing,” said Mark.
Most plans include mutual funds. But we are beginning to see some plans with ETFs, or Exchange Traded Funds, which we prefer. Your bond funds are typically cheaper than your stock funds. International funds are more expensive than domestic funds.
“Everybody’s situation is different. You gotta have the right mix, and you have to make sure that you’re rebalancing,” said Mark.
Limited asset classes
What we’re seeing are fewer and fewer choices. The more choices your employer offers, the more expensive it is to administer the plan. So, you really have to understand what those choices are, what the fees are and what they’re invested in.
Listen to the entire episode to hear more. Click on the timestamps below to skip to a particular segment.
Nothing’s for free. Even if you don’t see the fee, it doesn’t mean it’s not being charged.
- Mark Silverman, CFP®
Let’s get rolling with the first episode and you can use the timestamps below to skip around to specific topics.
1:00 – Administrative costs
2:10 – Mutual funds
3:34 – Limited asset classes
4:25 – Subpar conservative investments
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