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0 pointsidunno2469y ago0 comments

how does that compare to other fees all in? Obviously the employee cost is really good, but is the typical 1-2% employee fee company just passing that $8 onto you? Especially in lower paying companies, that could add up

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ucaetano9y ago

$8/month = $56/year, divided by Vanguard's 0.0018 equals $31k.

So if the employee has in his 401k:

- $20k, the equivalent fee is 0.41%

- $50k, the equivalent fee is 0.24%

- $120k, the equivalent fee is 0.18%

- $200k, the equivalent fee is 0.16%

- $1M, the equivalent fee is 0.136%

samb17299y ago

Could you elaborate on how you got those numbers? You lost me at $56 but I don't understand your percentages either so perhaps I'm missing something here.

ucaetano9y ago

Percentage = [(56/Capital) + 0.13%]

56 = cost to employer

Capital = how much the employer has in the 401k

0.13% = average fund fee

So if Capital = 200k

Percentage = [56/200k + 0.13%] = 0.028% + 0.13% = 0.16%

My guess is that they're focusing on new plans, not allowing rollover from previous plans and not allowing employees to keep the plan after they leave the company. In this situation they're able to have mostly savers with low or very low balances, and they charge on average higher fees than Vanguard and others.

mercutio29y ago

$8/month = $96/year, not $56.

ucaetano9y ago

Correcting myself, it's $96, not $56. That bumps up the fees a bit. Sadly, too late to edit it.

thedufer9y ago

8 * 12 is 96, not 56.

ucaetano9y ago

Ha, good catch, a typo and lack of sleep propagated through the numbers :)

j / k navigate · click thread line to collapse

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ucaetano9y ago

$8/month = $56/year, divided by Vanguard's 0.0018 equals $31k.

So if the employee has in his 401k:

- $20k, the equivalent fee is 0.41%

- $50k, the equivalent fee is 0.24%

- $120k, the equivalent fee is 0.18%

- $200k, the equivalent fee is 0.16%

- $1M, the equivalent fee is 0.136%

samb17299y ago

Could you elaborate on how you got those numbers? You lost me at $56 but I don't understand your percentages either so perhaps I'm missing something here.

ucaetano9y ago

Percentage = [(56/Capital) + 0.13%]

56 = cost to employer

Capital = how much the employer has in the 401k

0.13% = average fund fee

So if Capital = 200k

Percentage = [56/200k + 0.13%] = 0.028% + 0.13% = 0.16%

mercutio29y ago

$8/month = $96/year, not $56.

ucaetano9y ago

Correcting myself, it's $96, not $56. That bumps up the fees a bit. Sadly, too late to edit it.

thedufer9y ago

8 * 12 is 96, not 56.

ucaetano9y ago

Ha, good catch, a typo and lack of sleep propagated through the numbers :)

j / k navigate · click thread line to collapse