401k plans are designed to help workers save for retirement. Unfortunately, 401k accounts often reduced prior to retirement by loans that are not repaid, hardship withdrawals, and cash-outs resulting from a job change. Experts call these reductions “leakage.” 401k leakage can greatly reduce a worker’s
Last week I discussed how the trend toward index investments among our clients is accelerating – even for the smallest 401k plans. This week some thoughts on how our clients are using index investments for long term asset allocation strategies.
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Smaller 401k plans pay more in fees and have a harder time implementing best practices – right? Not our clients.
Yale law professor Ian Ayres got hammered last year when he co-authored a paper attacking high cost 401k plans. Professor Ayres and Professor Curtis of UVA are back with a new article on 401k fees and practices. While I don’t agree with every point made in the paper, I do endorse their focus on fees and transparency.
It’s been an interesting year for 401k plans in the news cycle. First, we had PBS’ Frontline piece, The Retirement Gamble, which generated a lot of discussion and debate about fees. Now, we have a professor from Yale Law School who has done some research into 401(k) plan costs.