[tps_header]Retirement. For recent college graduates, it feels like that milestone while never arrive. While those that have been in the workforce for nearly 40 years are anxiously hoping they can afford to retire. As retirement pensions have disappeared like the dodo bird in most industries, employees are now responsible for saving for retirement. While many employers offer a matching program to incentivize 401k retirement savings, sometimes it’s best to invest for retirement outside your company 401k.[/tps_header]

Reason #1: Your Company 401k Has Lots of Fees

Why do most people shop online? Partially because it’s more convenient, but, mostly because they can buy the same item for a few dollars cheaper. Several online purchases over the course of a year or lifetime can very easily lead to thousands of dollars in savings. The same can be said for your 401k plans as some are more expensive than others.

With the average annual operating fees for a 401k plan at 1%, you pay $100 for every $10,000 you have invested. If you invest outside your 401k in index funds with a 0.15% expense ratio, you only pay $15 per month with that same $10,000 investment and have an extra $85 each year to invest. Over the course of your working career that’s a savings of at least $3,400 before including interest and anything you invest in excess of that first $10,000! The hot new trend is robo-advisors, where artificial intelligence helps new and old investors get started at very low expense ratios.

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