Tips from AAPR About Your 401(k)

In a recently released AARP survey, it was reported that more than 83 percent of all 401(k) participants were found to not know that they were expected to pay fees and other expenses that are associated with their plans. 401(k) plans normally include three different types of fees. These are Investment fees, Administrative fees and Individual fees. If you are considering the possibility of implementing your own 401(k) plan then here are some tips from AARP to help you along:
First, you should do your homework. Ask your plan administrator about all the fees that may be associated with specific accounts. Compare those fees to others of various funds in a class and search for the lowest expense ratios.
Talk with your Human Resources Representative and ask them to review the offerings if your find that your plan has high fees associated with it. You may want to consider changing to a plan with a lower cost ratio.
Make saving a priority and focus more on putting money away and not on spending your retirement savings. Individual fees from loans, wire transfers and even hardship withdrawals can seriously deplete your savings.
Consider a No-Load mutual fund. Most plans will offer several mutual funds to choose from. Selection the no-load funds since they have no sales commission charges associated with them.
You can also consider Index Funds. These are composed of stocks that mirror a particular stock index. These funds tend to outperform the average fund and typically have much lower fees since there is less trading and no need for portfolio management.