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Don't over react to 12b-1 fees and expense ratios. Your concern is how they perform after fees. If performance far exceeds the indexes, higher fees can be well worth it. But do not accept a high fee fund that under performs the indices.

I think Paul is trying to pre-empt me jumping in here. Seems like we tangle over this all the time. :)

The question is what's a better predictor of future mutual fund performance relative to a comparable benchmark: the fund's past performance, or its expense ratio? Paul contends the former and I'm convinced of the latter. Here's some reading if you'd like:

If I were in this situation, I'd grit it out and try to find good values among the expense ratios that are available in the plan. For example, Fidelity's site shows the Mid Cap Value fund with an expense ratio of 0.84%. That's not great, but it's tolerable if better options aren't available.

The jury is still out on Freedom funds. They are supposed to give you a mix of bonds and stock that increases in bonds as you get closer to retirement. But Fools don't retire on bonds.

On this one I agree with Paul, though. Most "target retirement" type funds are more conservative than they need to be. In the history of the US financial market, there has never been a 30-year period when bonds outperformed stocks. In other words, 100% stocks is correct for a mixed fund unless we're about to see a generation-long historical anomaly. The Fidelity site tells us that even the Freedom 2050 fund holds 10% fixed income, which is too much.

Hope that helps,
- Erik
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