Are you losing 1/3 of your 401k?

[OldPoop]

I run my own IRA and Roth and trading account, so I have absolutely no idea if their 1/3 loss claim is true, but it is an interesting very short read.

http://www.wealthwire.com/news/finance/3440?r=1

[PEtrader]

If anyone is losing that much to fees than they should call FINRA and a lawyer and sue for failing the fiducary rule on part of the trustee and advisor.

401ks are one of the cheapest ways to invest for anyone because the majority don't carry trading fees.  They work by using "retirment class shares"  that charge much lower rates than normal funds , .25-.90bps, and no commish when they are traded to the advisor.  They don't always, but the majority do.  On top of this alot of the actual costs of the running the plan is passed on to the company or is paid for from forfeiture funds from people losing money when they leave to vesting rules.

I think the arguement that the article is making is that if you left your acct in a your portfolio for 50 years and never made any return in the market, than you could incur high fees.  If you haven't made any return in the market in 50 years than why did you keep your money there, and something must be seriously wrong ie it just isn't statistically going to happen if your account is diversified.   You also would incur much higher fees if it was anywhere else in the market.  You typically are not charged for holding cash besides possibly a minimal acct charged by the money mkt.  The fees they are talking about sound like possibly a self-directed acct which is basically a 401k acct that you can trade like a regular brokerage acct.   It is more expensive because you ahve alot more paperwork for ERISA to do and it is still in line with a normal brokerage acct. 

I think these guys are just misinformed or writing from a slant. 

[McKdaddy]

If anyone is losing that much to fees than they should call FINRA and a lawyer and sue for failing the fiducary rule on part of the trustee and advisor.

401ks are one of the cheapest ways to invest for anyone because the majority don't carry trading fees.  They work by using "retirment class shares"  that charge much lower rates than normal funds , .25-.90bps, and no commish when they are traded to the advisor.  They don't always, but the majority do.  On top of this alot of the actual costs of the running the plan is passed on to the company or is paid for from forfeiture funds from people losing money when they leave to vesting rules.

I think the arguement that the article is making is that if you left your acct in a your portfolio for 50 years and never made any return in the market, than you could incur high fees.  If you haven't made any return in the market in 50 years than why did you keep your money there, and something must be seriously wrong ie it just isn't statistically going to happen if your account is diversified.   You also would incur much higher fees if it was anywhere else in the market.  You typically are not charged for holding cash besides possibly a minimal acct charged by the money mkt.  The fees they are talking about sound like possibly a self-directed acct which is basically a 401k acct that you can trade like a regular brokerage acct.   It is more expensive because you ahve alot more paperwork for ERISA to do and it is still in line with a normal brokerage acct. 

I think these guys are just misinformed or writing from a slant. 

^^^^