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I'm considering moving my current 401k to another area/company. I'm retired from the company where I set up the account. The investment options seem limited.

Currently I'm with Fidelity
I have about 75% in BTC Lifepath 2025 (avg annual return 3.82)
about 5% in PIMCO Total Return Inst CL (avg 5.99)
Remainder in Invesco Van Kampen Growth & Income Instl (avg 2.51)

What I really don't like are the fees associated with these accounts. The Lifepath is low (.014%)

but the other two are .46% and .40% respectively.

Is this normal for fund management fees and would you recommend moving them to another fund or company? There are only a handful of funds available for this company/401k setup. I'm assuming I can roll it all over elsewhere if I wanted, right?

Open to suggestions. Not an investment guru. Prefer invest and forget (to some degree) strategy. I'm 54 now and expect to work at least until 65.

Thanks,
Rut
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The expenses for institutional funds in a 401k are usually higher than publicly traded funds which exist in a more competitive marketplace.

Are you still with the employer sponsoring the 401k? If so, you cannot move the 401k until you leave your employer. If it is a former employer, you can roll the assets over to a Traditional IRA without any tax liability or penalty. In the Traditional IRA, you can invest in any fund, ETF or company offered by the brokerage hosting the account.

Fuskie
Who hopes this helps...
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I am retired from the company associated with this account. Where would be a good place to start for looking for a new home for this account?

If I move it into an IRA are there some companies better suited to go with than others? I guess I'm asking who to steer clear of.

Rut
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The expenses for institutional funds in a 401k are usually higher than publicly traded funds which exist in a more competitive marketplace.

Data to support your assertion please?

For the funds that the OP posted, here are the retail quoted expense ratios, along with a link where the retail expense ratio is listed:

                                     OP         M*       M* Link
BTC (BlackRock) LifePath 2025 0.14% 0.52% http://quote.morningstar.com/fund/f.aspx?Country=USA&Sym...
PIMCO Total Return 0.46% 1.65% http://quote.morningstar.com/fund/f.aspx?t=PTTBX
Invesco Van Kampen Growth & Income 0.40% 0.83% http://quote.morningstar.com/fund/f.aspx?Country=USA&Sym...


As you can see, all of the retail rates shown at Morningstar are higher than the rates the OP quoted.

To the OP: If you are trying to get lower expense ratios on the same funds that you have in your current 401(k) - probably won't happen in an IRA, unless you have millions to invest in order to get institutional rates. However, you do need to watch out for the possibility of your 401(k) administrator charging you fees in addition to the expense ratios. If that's happening, it could be that you would be better off in an IRA.

Additionally, if you are not happy with your fund choices in the 401(k), you may want to move to an IRA. If you are unhappy with your current expense ratios, be sure to find out what the expense ratios of the funds you want to move to are before you make your decision.

AJ
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disagree that funds within a plan are usually more expensive than funds outside of the plan. Except in the case of small market plans, a 401(k) plan usually qualifies for institutional shares (lower priced share classes) of the same "retail" funds in which the plan invests. If it does, and the plan fiduciaries don't take advantage of it, they will probably have to open their checkbooks to make up the difference (as is the case with respect tot he Walmart plan - who's idiot fiduciaries (my editorializing) invested in retail priced share classes despite having the buying power of a many billion dollar plan).

There are costs associated with running a 401(k) plan over and above the costs of the investments, but in many cases those costs are covered by the investments through revenue sharing and other mechanism to reimburse the plan's recordkeeper for taking some of the burden off of the mutual fund distributor (accounting, statements, call centers, and the like).

In the case of smaller plans, the costs of running the plan can exceed the amount of revenue available, in which case the employer may pay, or the plan (i.e. the accounts of the participants) may pay. In any event, the value of the tax deferral typically is far greater than any additional expense paid.

If you are retired, there are other options, but check out the pricing of the funds (assuming you want to invest in funds) in the retail sphere as compared to the price paid within the plan (all things being equal).
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If I move it into an IRA are there some companies better suited to go with than others? I guess I'm asking who to steer clear of.

If you are trying to find lower expense ratios than the 0.40% that you consider 'high' (although it's actually reasonably low), you probably need to look at Vanguard Index ETFs and Vanguard Index Funds. You are unlikely to find any managed funds with lower expense ratios than you already have.

Fidelity also has some reasonably low cost funds, but again, without institutional level purchasing power, they will probably be higher than the expense ratios you already have for the same funds.

AJ
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Thanks for the replies. I guess the rates aren't that bad. These are the rates posted on Fidelity's site. Not sure why they are different from morningstar.

I guess I'm really looking for better performance from the funds. Of the limited ones there, none are doing very well. Perhaps it is just the market. 3.82% for the lifepath 2025 fund doesn't seem so great.

They do offer another fund called Intech Large Cap Growth that seems to do well but I can't find a rating on it anywhere. Here is the summary:

The Fund invests in Large Company Growth stocks. INTECH utilizes a mathematical investment process, which seeks to build a potentially more efficient portfolio than its benchmark, the S&P 500/Citigroup Growth Index (formerly known as the S&P 500/Barra Growth Index). This process does not attempt to predict the direction of the market, nor does it have a particular view of any company in the portfolio. Instead, the process uses the relative volatilities of the individual stocks as well as their correlation (or relationship to one another) to build a portfolio that attempts to outperform the index without increasing relative risk. Unit price and return will vary.


It also says the expense ratio is 0.00% which doesn't seem feasable. Any thoughts on this?
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There are many funds that have done better than what you posted. Just be sure you are looking at the same time reporting periods when you compare them. I also have Fidelity sponsoring my 401K and I have a few more choices than what you have indicated.
My equivalent choice would be a Fidelity Freedom Index 2025 Fund.
That has done 3.03% for the year but has done 6.8% in 2012 so far.
My Expense Ratio is .31%

Outside of my 401K that same funs would have higher expenses.

You should be able to look at each funds history and expenses on your 401K website.

I am presently in
Fidelity Real Estate Invesment that has done 13.78% past year
Fidelity Capital Appreciation that has done 9.00%

These have fees of .85 and .91
The Real Estate one lost money 2 years ago while the Cap Apprec did 2%
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Intech Large Cap Growth

1 year ending 3-31-12 8.78%
5 Year " " 4.42%
This year so far 12.81%

No Idea what the expenses are.

Mike
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I guess the rates aren't that bad. These are the rates posted on Fidelity's site. Not sure why they are different from morningstar.

It's because you're getting the institutional rates rather than the retail rates.

There are economies of scale in dealing with millions/billions of dollars in a large company's 401(k) plan as opposed to a few hundred or thousand dollars in an individual's IRA. That's why big company 401(k)s get better deals than small company 401(k)s. Additionally the retail rates generally have signficantly higher advertising/marketing costs that need to be covered, in comparison to the funds that are being managed - the institutional funds have very little advertising or marketing that they have to pay for.

They do offer another fund called Intech Large Cap Growth that seems to do well but I can't find a rating on it anywhere. Here is the summary:

The Fund invests in Large Company Growth stocks. INTECH utilizes a mathematical investment process, which seeks to build a potentially more efficient portfolio than its benchmark, the S&P 500/Citigroup Growth Index (formerly known as the S&P 500/Barra Growth Index). This process does not attempt to predict the direction of the market, nor does it have a particular view of any company in the portfolio. Instead, the process uses the relative volatilities of the individual stocks as well as their correlation (or relationship to one another) to build a portfolio that attempts to outperform the index without increasing relative risk. Unit price and return will vary.


It also says the expense ratio is 0.00% which doesn't seem feasable. Any thoughts on this?


It's a hedge fund.

While it may not give an expense ratio, you can derive it from their website https://ww3.intechjanus.com/Janus/Intech/intech?tabSelected=...

Subtract the 'returns net of advisory fees' from the 'returns gross of advisory fees' - the difference is the fee expense rate.

Funds can choose to absorb part/all of the expenses, depending on their deal with the adminstrators, so a 0% ratio is possible.

AJ
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