questionsdo you know what your 401k is costing you?

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I wish I had a 401K. As the economy stands I'm grateful to have a job.

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vanguard is the way to go to avoid fees. they're basically just like a credit union, when you invest through them, you're now part owner of vanguard.

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If yours is only fifteen bucks a year, I am embarrassed to say what mine is. I will have to go back and check my statement to see if we're looking at the same number. I want to say mine was $375 for the year. But I thought it called it a management fee or something like that. Something the company used to pay, but I pay it now that I don't work for them anymore.

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@bnbsouthworth: since i dont work for the company anymore i immediately pulled it out and rolled it into one at my bank where i don't get charged a fee anymore. if i had left it with the company it was 37.50 per month if i just left it sit, more if i tried to do anything.

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@kamikazeken: That the funds own the company and you buy the shares is a non-event and really has no importance at all. They're not voting shares in the company.

As to avoiding fees, that's not true at all. Their claim to fame is that they have the lowest management fees for index funds.

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@moosezilla: If you rolled an old 401k into your current one, you're probably still paying a 401k management fee but just to someone else. Or do you mean an IRA Rollover? Depending on the institution, there may or may not be a fee for IRAs.

There's also a fund management fee on top of that, too.

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@bnbsouthworth: As I wrote earlier, you can do a 401k Rollover where you move the funds in your 401k into an Rollover IRA. This will allow you to manage your own money without having to pay the 401k plan administrator that $375. Banks, brokerage firms, and mutual fund companies will help you with the rollover. It's an easy process and many don't charge a fee.

If you're confused about what to put it into, you can buy similar mutual funds in your Rollover IRA that are in your 401k plan. In fact, the Rollover IRA pretty much opens your investment options to pretty much anything that's on the market - stocks, mutual funds, bonds.

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@first2summit: Rollover to either Vanguard, the have the lowest cost plans. They also have the most flexibility in choices. They have the lowest cost mutual funds available. If you are braver and really want to keep costs low rollover into a brokerage account ts then buy Vanguard exchange traded funds. They have very low costs and Vanguard doesn't charge commissions on their own ETFs.

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@first2summit: I have had the impression that all shares are voting shares. Maybe I've been too close to the institutions but what I think happens is that those shares, if being held on a proxy date, are assigning their collective voting rights, or else the officers of the fund are voting on the fund's behalf, because the funds own the shares. That's the tip-point to it, because the fund can purchase stocks in order to have votes, not just to invest. It's preferred shares that don't have the votes, which are not often traded as much as common shares. I'm sure it would depend on the fund.

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@wilfbrim: I'm a finance geek, sorry to say, not perfect, just focused a bit. During one year of extreme geekdom I read prospecti of funds that interested me. Then I chose one and started to have the quarterly and annual reports sent to me. One other year, almost as geeky as the first but considerably later, I spent time dissecting those reports. I thought I found something that wasn't talked about. We know about fund expenses, right, which are the administrative costs. We know about the capital gains and losses, short or long term, and we know about dividends and returns of capital. But what has escaped radar are the brokerage fees. These get factored into the NAV. They stay absorbed there, and the more trades there are the more is taken by brokerage fees. If I'm the only one thinking this then, well then I'm just loopy, but have you noticed?

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@srfoolishbuyer: Yeah transaction fees are another hidden cost of the fund. That's another area where Vanguard has most other companies beat for a couple of reasons. The first is they tend to not do a lot of active management, so they keep the number of trades down. The other is the scale they work with. Their funds hold a lot more money so the transaction fees are a much smaller part of the overall costs.

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One of mine is with Vanguard and it is $40 per year which I thought was too high. I am planning on moving it over to ScottTrade (sp?) but haven't gotten around to it yet.

cf cf
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@samstag: and @cf Transaction fees are the "hidden costs" you get warned about by the general financial analysts in the media and such, but that wasn't what I meant. I mean, the hidden, hidden costs. Do you recall buying any shares of stock on your own?

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@samstag: I think you are saying that the broker fees are factored in, and that they don't do a lot of trades. I think you are saying that the fund is cash heavy. What's the growth rate, then?

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I wasn't able to edit my post(s) above but I found a government website that explains what I mean.
The address is this: http://www.dol.gov/ebsa/publications/401k_employee.html

The text heading to look for is "Investment Fees". It is a government website I'm quoting:
"Investment Fees - By far the largest component of 401(k) plan fees and expenses is associated with managing plan investments. Fees for investment management and other investment-related services generally are assessed as a percentage of assets invested. You should pay attention to these fees. You pay for them in the form of an indirect charge against your account because they are deducted directly from your investment returns. Your net total return is your return after these fees have been deducted. For this reason, these fees, which are not specifically identified on statements of investments, may not be immediately apparent. (see below for more information on investment-related fees)"