401k what is expense ratio

Advertiser Disclosure. Reduce your fees, retire richer. See how you could save on fees. Check out our tool powered by FeeX. Get started. Compare funds.

No matter what you're paying, Blanchett says it generally still makes sense to invest in your k. Yet understanding plan fees becomes critical when you're debating what to do with a k once you leave a company.

At that point, you typically have the option to roll it over to an individual retirement account, move the money to your new employer's k or leave the funds at your old employer's k. You could cash it out, but Luber says that option "certainly should be a last resort for most people. If you were at a big company and the k plan offers a lot of investment options and inexpensive fees, it could make sense to keep it there, Blanchett says.

Keep in mind that unless you know you're in a plan that's "egregiously expensive," there's no rush to decide what to do with your k , so you have time to do your homework. You can use a tool like FeeX to see how your current k plan fees stack up and then decide the best next steps. Like this story? Skip Navigation. This is why index funds are better suited for k accounts.

Of course, in order to achieve the lowest possible investment expense, you would need to meet the minimum purchase requirements. Fortunately, there is an easy way to get around those requirements. By starting a k account or rolling over an existing one to Human Interest , you get access to all low-cost Vanguard index funds from every asset class and risk category, including those in the Admiral class.

Besides index funds in U. This is coming from a man that has been directly, and nowadays indirectly, responsible for keeping a Studies have shown that the rare mutual fund that beat its benchmark in one period is unlikely to do so again in subsequent periods. Human Interest works with startups to help their employees save with a great, scalable k.