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401(k) Plan Expenses

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According to analysis by MSN Money, in some cases a low-fee 401(k) plan with no company match beats out higher-fee 401(k) plans with company matches, so it pays to be aware of your plan’s expenses.

The article notes that one of the best 401(k) plans in existence is the government’s Thrift Savings Plan with an annual expense of only 0.06 percent. That has to be hard to beat. Unfortunately, you have to work for the government in order to be eligible.

Updated February 7, 2012 and originally published November 1, 2005. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .


avatar Caitlin

my 401(k) plan is at Scudder and the fees are *outrageous* … like well over 1% expense ratio on an S&P 500 index tracker. Insane. And…no choice in the matter. ugh.

avatar F. D. Bryant III

Considering you don’t really have a choice in the plan your company has seems kinda irrelevant (unless of course your in charge of the selecting the plans – in which case pick a low cost plan and give an employer match).

avatar Anonymous Gerbil

With a match, a high cost plan is attractive if you don’t think you’ll be at the job forever – you can take the match and roll over the 401(k) to an IRA at Vanguard or Fidelity when you go (or even to the 401(k) at your new employer if it looks good). High fees only do real damage after many years pass, but the match can work instantly.