Yesterday we launched a feature that many of you have asked for – 401(k) Fee Analysis. Here’s a more detailed look at what we’ve enabled. Employer sponsored 401(k) plans have limited sets of options and can be daunting to navigate because options with high fees tend to weigh down your portfolio.
401(k) Fee Ratings
We wrote about the impact of fees on the 401(k) our last post and why it’s important to fix this early in your portfolio. Today, even without signing up you can go to our 401(k) Recommendations page and get a sense of whether your 401(k) plan is expensive or reasonable based on an average expense ratio of options in your plan.
We wrote about the importance of choosing well for your situation and keeping fees low. As part of this feature, we’ll give you a rundown of how much a balanced recommended portfolio should cost within your 401(k). This is a guide to whether much better options exist in your plan to put together a good portfolio. We use an average 30 year old investor retiring at 65 to come up with this recommendation.
The cost of your 401(k)
If you sign up for FutureAdvisor and connect your 401(k), FutureAdvisor will now tell you how much you’re actually paying in each 401(k) account. This will give you a more detailed picture of your portfolio fees breakdown.
As always we’ll be giving you step-by-step recommendations to improve. You can find these recommendations in your Portfolio Recommendations tab.
We hope these features together will help you understand more clearly how much you’re paying in your portfolio and take action to improve. As always, we love to hear your feedback, please let us know what you think.