Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 1
My employer decided to change 401(k) plans, and I'm not real sure what my options are....

They are switching to Manulife, and I just don't get a "Warm Fuzzy" from them, or my employer for that matter.

I looked at Manulife's fees, and it seems to me that the Annual Investment Charge(AIC) seems a bit high for most funds that I can't even track. (avg 1.25%) On top of that, my employer is going to be charging us a "Fee" for managing the accounts. I asked what the "Fees" were going to be, and they said it would be according to "Basis Points" that they will determine at a later date. HUH????

I already Max out my Roth, DW contributes %12 pay to her 401(k), and our AGI is under 100k.

Any ideas on what I could do if I forego the company's 401(k) plan?

thanks again. :)

Print the post Back To Top
No. of Recommendations: 0
Guess I stumped everyone with the previous post.

Oh well, I did find out how much my employer was going to charge and between that and the AIC, we're talking about 2% per year. Yuck.
Print the post Back To Top
No. of Recommendations: 0
mikelly39,

The determining factor would be whether or not your employer matches funds. I don't see that info in your post.

I don't think "stumped" is the right word. Just not enough info to go on.

Beth
Print the post Back To Top
No. of Recommendations: 0
...The determining factor would be whether or not your employer matches funds. I don't see that info in your post.

Well, it's a discretionary match that will max @ 3% of my income. Since it is discretionary, I really would not count on it being there.


thanks

mikelly39
Print the post Back To Top
No. of Recommendations: 0
Oh well, I did find out how much my employer was going to charge and between that and the AIC, we're talking about 2% per year.

Can you roll your current (pre-switch) amount into an IRA? At least then only new contributions would be reamed at the 2% rate.
Print the post Back To Top
No. of Recommendations: 0
...Can you roll your current (pre-switch) amount into an IRA? At least then only new contributions would be reamed at the 2% rate.

Well, I was told "NO", I cannot do that. It's all or nothing. Yay.

Thanks for the suggestion though.

Print the post Back To Top
No. of Recommendations: 0
mikelly39,

Well, it's a discretionary match that will max @ 3% of my income. Since it is discretionary, I really would not count on it being there.


Well that really bites. Sounds like a pretty lousy 401k to me. Your employers should be shot.

My previous employer did that to our 401k recently. Fortunately, I could move it to a Rollover IRA with Vanguard.

I hate to sound cliche here, but are all your credit cards paid off? Do you have an emergency fund?

BTW, when you put my words in bold lettering, they sounded kinda mean. I most assuredly did not intend to sound that way. Sorry if that is how it came across.

Beth

Print the post Back To Top
No. of Recommendations: 0
...Can you roll your current (pre-switch) amount into an IRA? At least then only new contributions would be reamed at the 2% rate.

Well, I was told "NO", I cannot do that. It's all or nothing.


That's the problem with 401k's. You are pretty much locked into whatever your current employer wants to do to you there. You have some choices in funds, but a lot of the fees are out of your control.

I wish I had better info for you. It is great that you understand what they are doing to you. Lousy that it is happening. It sounds like you have already made the best choices out there.

Without changing jobs, you are kinda stuck at this point.

Future contributions can be put into something else, but of course that will be taxable (since you have maxed out other options).

Sorry.

Beth
Print the post Back To Top
No. of Recommendations: 0
Sorry about that. Not meant to be mean. I just thought it was easier to tell the difference between messages.

..."I hate to sound cliche here, but are all your credit cards paid off? Do you have an emergency fund?"

Yes, and yes. (Quite proud of that)
Print the post Back To Top
No. of Recommendations: 0
mikelly39,

..."I hate to sound cliche here, but are all your credit cards paid off? Do you have an emergency fund?"

Yes, and yes. (Quite proud of that)


That is quite excellent!!! Congratulations!! Many people forget that part. Heck, you're way ahead already.

(And you didn't sound mean, rereading my words made them seem mean. It did make it easier to tell the difference.)

Beth

Print the post Back To Top
No. of Recommendations: 0
...That is quite excellent!!! Congratulations!! Many people forget that part. Heck, you're way ahead already.

Thank you. It took me ~5 years to get out from under the mountain of debt I had. (3 years as a recovering "Debt-aholic")

FYI, I decided to go with the lousy 401(k) anyway.

Main reason: -- Not enough dicipline to contribute to the IRA(s) over the course of the year --

Hopefully, the market makes a "comeback" soon, so I won't worry so much about it anymore. :)

Thanks for the help!

Mikelly39

Print the post Back To Top
No. of Recommendations: 0
Main reason: -- Not enough dicipline to contribute to the IRA(s) over the course of the year --

One of the best reasons I know to contribute to a 401K over a ROTH/IRA. Good thing you know that about yourself.
Print the post Back To Top
No. of Recommendations: 0
Hopefully, the market makes a "comeback" soon, so I won't worry so much about it anymore. :)

Amen!!!
Print the post Back To Top
No. of Recommendations: 0
Hopefully, the market makes a "comeback" soon, so I won't worry so much about it anymore. :)

Amen!!!


Actually, I'd much rather see the stock market remain down for the next 20 years, until I am ready to retire, then see it shoot through the roof during my golden years...
Print the post Back To Top