Among workers 18-34 years old, 56% are not saving. A 58-yr old who saved by putting aside $100 per month since 1979 lost around $100k in 401k fees. Wallmart and its brokerage, Merrill Lynch, agreed to pay $13.5 million settlement in a class action suit by failing to negotiate lower 401k fees for the plan’s mutual funds which costs the participants/employees about $60 million over 6 years.
Employee Retirement Income Security Act (ERISA), a federal law governs retirement plans.
Red Flags or Signs of a dud 401k:
• No index funds
• Fund expense ratios of 1% or more
• Delayed vesting of employer match
• Matches only in company stock
• Funds not diversified
• Low or nonexistent employer match
Mutual funds costs estimate for a $50,000 saving invested over 20 years:
• Fidelity 0.62 expense ratio, total costs $12,199
• T Rowe Price, 0.75 expense ratio, total costs $14,529
For the self-employed, there are other options such as Roth IRA, Indexed Annuities and Index Universal Life Insurance. See books of Patrick Kelly , Tax Free Retirement and Retirement Miracle
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