The problem with most 401K contracts...
No transparancy
A 401K, for most American employees it is the hope for the future. With their 401K contract, they hope to have a nice retirement, with the money saved in this contract they should be able to keep up their living standards they had while they were working. But, this 401K is in a lot of cases not as profitable as people think it is...
First of all, there are thousands of different 401K plans with banks, insurers and brokers all over the USA. And not every 401K is investing is in good funds or ETF's. To the contrary, some are investing in very lame funds and ETF's... Something a lot of employees are not aware about. A good 401K invests in funds or ETF's that have active management, where the portfolio changes to the economic circumstances. Especially because of the fact that a 401K invests over such a long time, in 20, 30 or 40 years, lots of things change, and the leading stocks today are not those that were leading 20 years ago, and it will surely be different in 20 years time too. So, an actively managed 401K is a must.
In some contracts it isn't even clear where the money is invested. No transparancy at all. That is a real NoGO!
Costs, and hidden costs
And then there is another darkside to the 401K business. Costs! Of course a contract like that has costs. The people that handle the money must be paid too. Nobody works for free. But there are limits to those costs. And some 401K contracts have insanely high costs. 5 to 7 % cost on every deposit, yearly "working costs" of 3 % or even more. "Switch costs" when money is transferred from one fund to another... Name of possible cost and it has been added to some contracts.
For this reason, millions of 401K contracts have very little return, even when the stock market soars.
And that is such a shame. As compound interest is the 8th wonder of the world, and your 401K needs the compound interest to create a very nice sum of money.
Check it and look for another one
But it doesn't have to be this way. Anyone is free to open a 401K with another broker, where the cost structure is normal, and where the funds and ETF's used are of high standard AND actively managed. It just takes a little of your time to find the right fit for you. You can transfer the reserve and boom your on your way to compound your money nicely, and create a great retirement!
Check your 401K!
Sincerely,
Pele23
Posted Using LeoFinance Alpha
Any suggestions? This was a great read and I’d love to know more of what you think are some of the better options out there!
I would say, look at the annualised returns, easy to find via Google. Like these Vanguard funds.
For broker, I would try to look for a local broker instead of a big firm. They are easier to negotiate with about costs.
Legit. Thanks mate!
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At that time if I had money I would invest in top crypto projects and wait for some time I know it will give us very good returns I would never keep my money inside the bank.
They usually steal the money or inflations takes the value... if you really want to have money in retirement, then you need to invest in the best cryptocurrencies, like: HEX PULSE PULSEX LASSECASH HIVE :)
Posted using LasseCash
Not sure which one is worse @lasseehlers: That you were giving that advice when Richard Heart's HEX and Pulse crypto scams were being artificially pumped to manipulate their prices or that you are still giving that same advice after Richard Heart has been charged by the SEC for those crypto scams.
Granted @lasseehlers knows about stealing money. He's already tried to scam the Decentralized Hive Fund with godawful proposals twice so far.