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Is Money Missing from Your 401(k)?

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Millions of workers in the United States have 401(k) retirement plans through their employer. Yet, most of those workers know almost nothing about what is actually happening in their 401(k) account.

Do you know how your money is being invested? Do you know what types of fees you are being charged, and why?

401(k) accounts are ripe for abuse by employers and financial planners. Most employees do not give their 401(k) much thought because the money is being set aside for retirement years in the future. They simply assume their 401(k) is being properly managed.

Federal law says you should be safe in these assumptions because your employer, as a “fiduciary” to the 401(k) plan, is responsible for acting with prudence to safeguard your retirement income.

But, unfortunately, many companies and financial planners know you are not paying close attention and try to take advantage by charging high fees and allowing employees to select bad investment options.

9 out of 10 Mutual Funds Under-Perform compared to the S&P 500 or their relevant benchmark.

Mutual funds, which are managed investment funds, make up a large percentage of the investments held in 401(k) accounts. But, these investment options almost always charge higher fees than indexed investment funds. And, what’s worse, 90% of the time these investments under-perform compared to indexed investment funds. Check out this article to learn more: SPIVA: 2021 Year-End Active vs. Passive Scorecard (

These fees add up quickly and cut into your retirement savings.

Despite being required to act with prudence and in the interest of the plan, many employers create 401(k) plans that charge high fees or make bad investment options available to the plan participants.

For example, your employer might offer an investment option with a 0.5% expense ratio when there is another, near-identical investment option available for a 0.1% expense ratio. While fractions of a percent might not seem like a big deal, over time, these unnecessary fees add up and cut into your retirement savings.

The Department of Labor provides the following example of one way that employee 401(k) accounts can be drastically impacted by employer mismanagement:

Assume that you are an employee with 35 years until retirement and a current 401(k) account balance of $25,000. If returns on investments in your account over the next 35 years average 7 percent and fees and expenses reduce your average returns by 0.5 percent, your account balance will grow to $227,000 at retirement, even if there are no further contributions to your account. If fees and expenses are 1.5 percent, however, your account balance will grow to only $163,000. The 1 percent difference in fees and expenses would reduce your account balance at retirement by 28 percent.

As this example makes clear, seemingly minor fees can cost you many thousands of dollars.

What are your options?

Saving for retirement is one of the most important things we do with our income. Many of us assume that putting money away in a 401(k) will ensure we can enjoy a comfortable retirement. But, in reality, many 401(k) plans charge high fees and make poor investments available to the participants. By creating these plans and not taking care to ensure the investment options are prudent, employers violate federal law.

The attorneys at Biller & Kimble are available for a free consultation to review your 401(k) plan. We have tools that allow us to evaluate the quality of your investment options and the expenses charged to you. If we discover any problems, our team is ready to fight to recover your losses.

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ADVERTISING ONLY: The information on this blog is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Past results obtained by Biller & Kimble, LLC are no guarantee of future results. Each case or matter is different and must be judged on its own merits.