SmartMoney Blogs

Ask SmartMoney
Your personal finance questions, answered.

What 401(k) Plan Should I Suggest to My Employer?

Question: I’d like to suggest a low-cost 401(k) plan to my employer. How can I find options?

— Ron Moe, Carson City, Nev.

Answer: In the 401(k) world, there’s a long-standing debate over how much bang you actually get for your management-fee buck. But one thing that influences the cost-efficiency of an employer’s fund offerings is the company’s size. Brokers may be more willing to discount their fees for bigger firms with employee account balances that average at least $50,000, says David Wray, president of the Plan Sponsor Council of America, an industry association. If you work for a smaller company, he says, you can ask your employer to add cheaper index funds to the lineup (fees run $13 to $20 per $10,000 invested, compared with $70 to $90 for actively managed funds).

Comments

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (0)

    • Be the first to leave a comment on this blog.

About Ask SmartMoney

  • Ask SmartMoney has a single, simple mission: Answer your questions. Answers are written by the staff of SmartMoney.com and SmartMoney magazine, with the help of outside experts. Topics cover investing, spending, retirement planning, saving for college, insurance, taxes and more. Submit your question in the form below, or email ask@smartmoney.com.