Small company 401Ks hammered by fees
| June 05, 2012 |
So you have $500,000 in your 401K. Under some scenarios you may have paid as much as $155,000 in fees for the privilege of lending Wall Street your money.
And it’s the small companies, like construction contractors, who get screwed the worst with annual fees up as high as 1.4 percent of assets. But just try and find out what the fees are, how they are levied (deposits or total assets?), who pays them and when. Wall Street hides this information in a tangle of obscurity and double talk. Truth is nobody knows except the fund managers and they’re desperate to keep you from knowing.
This will start to change in July, when new federal rules take effect requiring more transparency in 401K rules. So look at your statement carefully and prepare to be shocked.
Like Woodie Guthrie said: Some men rob you with a gun, some men rob you with a pen.