Next Friday Brings Changes to Retirement Account Investments: Mutual Funds and ETFs to Be Affected

by | Mar 30, 2023 | Fidelity IRA | 16 comments

Next Friday Brings Changes to Retirement Account Investments: Mutual Funds and ETFs to Be Affected




Big changes coming to retirement accounts soon!

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Mutual Funds, ETF’s, and Your Retirement Accounts All Changing Next Friday

Investors need to be aware that the world of mutual funds and exchange-traded funds (ETFs) is about to change. Next Friday, millions of investors with retirement accounts such as 401(k)s, IRAs, and other employer-sponsored retirement plans will experience an overhaul in the fund investment options available to them.

The changes come from a new Department of Labor regulation that seeks to level the playing field for investors. The new law will require retirement plan providers to offer a minimum of three different investment options, including one fund with low fees and at least one index fund that tracks a broad market index such as the S&P 500.

As a result, many mutual fund investment options- including some popular options- may no longer be available in retirement accounts. For example, some mutual funds may have high fees, lack diversification, or have poor performance records that don’t justify their cost.

The good news is that investors will have more access to index funds and ETFs. These investments are widely regarded as low-cost, diversified options that match or exceed the performance of actively managed mutual funds.

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ETFs, in particular, have skyrocketed in popularity in recent years. ETFs offer many advantages over mutual funds, such as lower costs, greater tax efficiency, and the ability to trade throughout the day. Unlike mutual funds, where shares are bought or sold at the end of the trading day at the closing price, ETFs can be traded like stocks and offer investors the ability to buy or sell at any time during market hours.

The new changes can benefit investors in more ways than lower costs and better performance. The increase in index funds and ETFs also offers investors more control over their investments. These investments allow shareholders to buy and sell shares whenever they please, giving them more control over their portfolio, ultimately leading to better investment outcomes.

In summary, investors can expect significant changes in their retirement plan options starting next Friday. The good news is that these changes should lead to better investment outcomes and lower fees. By switching to low-cost index funds and ETFs, investors can take advantage of their benefits while achieving their long-term retirement goals.

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16 Comments

  1. LoraxicaRealm

    Appreciate how you explain things…as always!

  2. john gill

    It was interesting but its will have little effect on the average investor

  3. InfoSecSeeker1

    Where on the site can I find more information about the brokerage and clearing fee ($4.17 or more per month) in addition to the AUM fee? I know one of your clients mentioned on another video that it goes away once you reach a certain threshold. Could you provide more insight on where we could find this information?

  4. WV Taco

    Will the S&P historical data mean anything after March 17th?

  5. Steve0 007

    This is why you don't go all in on the S&P 500. Always include small, large, value and growth. And never ever try to time the market.

  6. M B

    Should we buy ADP now or after the split?

  7. Bruce Smith

    Gonna be interesting to see it play out thanks Dustin.

  8. Daniel Putman

    It is true Dustin. We get more beautiful the more we drink. Lol.

  9. papijelly

    Guys help keep th channel clean and report scams and spammers. All these i made 300% in 5 days. Report it as miss information this channel and the comment section is too good to let it go bad bc of the age we're in .

  10. Phin Al

    Great one, as always! Thanks!

  11. Autobot Diva

    interesting and chaos at the same time

  12. J Dub

    What’s the impact to the price of any of these stocks or ETFs? Nothing? Up/down as they rebalance?

  13. Chris Walton

    Everything I see has MC and V already in the Financial sector, what am I missing?

  14. DIYerGirl

    Fascinating, and quite interesting that it's not being talked about in the news channels I track. I would think it's going to cause confusion and chaos if traders don't know about this, so another source of volatility.

  15. David Smythe

    The q’s are going to be even more volatile lol

  16. Kirk Stonecipher

    Love the FARAIM in the background!

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