Slam Dunk Money Action Tip

Added: 11/11/09 

• Did you change jobs and your money is still sitting in your former employer’s 401K or 403(b) plan?
• Why is your money at risk there?
• What is being hidden from you?
•  What actions do I take?

A press release from the House Committee on Education and Labor has raised some serious issues that aren’t at the forefront of discussions.  401(k) plan providers aren’t required to disclose a breakdown of the fees paid by either employees or employers.  There are many fees paid that you don’t even see!!!!
Why is this important to you? Some of these “fees” are paid by you when you buy mutual funds within a 401K .  Some 401Ks fees average 1.54% higher than others.  This can really make a difference in your ending balance (17% over a 20 year period)!!!!
 Action to Take:  Since legislation is stuck in subcommittee, the 401(k) providers may not be disclosing all the fees to you.  You may not really know what you are paying.  There are not many choices while you are still working for an employer, but if you leave your job, you should rollover your 401(k) plan into a Traditional IRA.  The advantages:
• You are in control of your retirement account
• You have more choices as to investments – not just limited to what is offered in the 401(k)
• You have more access to fee disclosures
• You have the option of companies and funds that carry lower costs

Watch OUT!!!!  There is a trick!!  Make sure when you speak with your IRA representative to help you in contacting your old 401(k) or 403(b) administrator, you tell them to set this up as a rollover and not as a cash distribution to you.    This is very important to avoid paying any taxes!!!!!!!!!  If you have questions, need help, would like more details, or want to discuss your particular situation, please call or email us.
Make a slam dunk this week and move all your money from former employers into a Traditional IRA!!!!

Cites:  Committee on Education & Labor Press release 4/22/09
The Wall Street Journal, August 3, 2009, Small 401(k) Plans Often Pay Big Fees, by Ms. Spors.

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