No. of Recommendations: 1
A few things;

1) Be sure to find out exactly what class of shares(like A,B, or C) of funds are being bought. These will have very different fee and load structures in addition to the insurance companies management fee. If NYLIM takes 1.35% and the fund expenses are 1.65% then you will be paying 3% per year. This sounds bad enough but when you consider that you are paying this premium on your contribution as well as the match, it is even higher. For example if your wife contributes $1000 and gets the $500 match for a total of $1500, 3% of which is $45. That is almost 10% of the company contribution, and not just this year, she will have this fee each and every year.

2) Check the vesting periods. It would be a bugger to pay all those fees then leave before she is vested.

3) Don't get overly excited about the tax deferral. When you are retired the 401k withdrawals will be taxed as ordinary income. If it has been in a taxable account, only the gains would be taxed at the capital gains tax rate, which will likely be much lower.

Greg
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