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Author: miniwoos Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75539  
Subject: another john hancock 401 Date: 9/20/2005 11:26 AM
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Hi folks,
I need some opinions on my 401k option. I am starting my 3rd year of contract work and was just given the option of contributing to the contractors 401k program administered through John Hancock. As a quick background - I currently have a rollover IRA (with AMERIPRISE)and already have plans to open and max out a ROTH. My problem is I'd like/need to save more but don't know if 401k is the best option. Looks like the plan is a group annuity and all the funds are administered through fund managers (investing in specific funds). There are actually some index fund options like total stock market index fund or small cap index fund or even international equity index funds but I'm having a tough time figuring out the fees. On the application form showing the funds it has a column showing AIC (annual investment charge)which on the index funds runs about .58% while others run as hight as 1.81%. There is also a column listing Morningstar benchmark category with average expense ratio. The numbers here show the expense rations on the index funds at 1.46% with others running over 2%. There is a subheader that indicates the the AIC includes both the expenses of any underlying mutual fund plus any additional direct charge against the entire sub-sccount and does not include any contract-level or participant record-keeping charges. WHEW - there's a whole lot of print that doesn't tell me a whole lot of anything. Which are the correct fees? I guess my question is does anyone think I should enroll in the program to get the pre-tax benefit (single/no debt/no dependents/no mortage/60+k salary) sticking with the lowest cost index type funds (while continuing to max out my ROTH) or just start up a taxable account and stash my money into indexs and/or ETF's or whatever my asset allocations figure out to be (thats a whole different issue). I'm starting to get so overwhelmed with options that I'm afraid I'll end up with the do nothing mind set.

Thanks for any opinions and help
miniwoos
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