My Employer’s 401(k) Is Horrible! (What Should I Do?)
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When it comes to planning for retirement, many employees rely on their employer’s 401(k) plan to help them save and invest for the future. However, not all 401(k) plans are created equal, and some employees may find themselves in a situation where their employer’s 401(k) plan is less than ideal.
If you find yourself in this situation, it can be frustrating and stressful to feel like you’re not getting the most out of your retirement savings. So, what should you do if you believe that your employer’s 401(k) plan is horrible?
First, it’s important to understand what makes a 401(k) plan “horrible.” Some common signs that a 401(k) plan may not be up to par include high fees, limited investment options, poor employer contributions, and a lack of communication and education about the plan. If you notice any of these red flags in your employer’s 401(k) plan, it may be time to take action.
One option is to talk to your HR department or plan administrator about your concerns. Express your dissatisfaction with the current state of the 401(k) plan and ask if there are any plans to make improvements in the future. Your employer may not be aware of the issues with the plan and may be willing to make changes if they see that it’s affecting employee morale.
If your employer is unwilling or unable to make improvements to the 401(k) plan, you may want to consider other retirement savings options. You can look into opening an individual retirement account (IRA) or a Roth IRA, which offer more flexibility and control over your investments. While you won’t have the benefit of employer contributions with these accounts, you may be able to find lower fees and better investment options than what your employer’s 401(k) plan offers.
Another option is to seek the help of a financial advisor. A professional advisor can help you assess your current retirement savings situation and create a plan for reaching your retirement goals. They can also provide guidance on how to make the most of your employer’s 401(k) plan, even if it’s not the best option available.
In conclusion, if you believe that your employer’s 401(k) plan is horrible, there are steps you can take to improve your retirement savings situation. By addressing your concerns with your employer, exploring alternative savings options, or seeking the help of a financial advisor, you can take control of your retirement planning and ensure that you’re on the right track for a secure financial future.
If there is no match… max out a Roth IRA first. The 1.5% fee is OUTRAGEOUS these days.
My highest fee option is 0.3%. The fund I'm invested in is 0.12%.
There is ZERO advantage to the employer 401k. Do a separate IRA.
The employer probably get a kickback for having certain mutual fund in their 401k.
Surely he could go the solo Roth 401k route? Then even without the match he could still pay after-tax dollars upfront each year, which would be of immense benefit.
I don't think they appreciate the magnitude of a 1.5% fee. Go run some numbers and you'll see the admin is robbing you blind. This is a hard pass.
My 401k is pretty bad on fees. Luckily they have a SP500 option thats closer to .1% fee rather than 1-2% in fees..
HR people just don't understand investing so it's like putting a blind man to lead a herd.
HR is out of touch with workers. All they care about is whether someone misgendered someone else now a days. They won't do anything that requires extra work even if it's necessary for employee retention.
I absolutely dread HR
Definitely max an IRA first. But also still worth it in the long run to put something into the 401K.
Then the bigger move is keep trying to find a better company to work at.
I'm in a similar situation. I just need to stick with this company for another year or two for experience, and then jump to a better option. I'm focusing on other accounts, and I don't make good money, so i put a pathetic amount in my 401k :/.
As a Boglehead, here’s my answer.
VTI & VXUS and chill in a taxable account after maxing out your Roth IRA.
0:55 Brian transforms into a chicken. (Edit: *Bo.)
Bo looks constipated in that thumbnail.
Hmmm, not sure that I agree with Bo on this one. You do save taxes going IN to the 401K but then you are gonna end up paying those taxes when it comes back out. If it has no match and high fees than I think you are better off skipping it.
Your videos were great!! I'm one of your viewers and have been watching your videos lately. I Would like to invest, but I still can't find the right învestment to commit to, I will appreciate any help here..
We just received our first quarter statement and I noticed they are behind in apply our contributions. They come out of our check every two weeks . Sometime they just do lump sums . Should they not continue our contributions on a regular basis?
My 401k I great no fees besides the fee on my index fund which is .001 and its roth and they match 6-10%
ALWAYS invest up to the company match, even if it’s horrible because the fees aren’t so high as to make not investing up to the match not worthwhile. You shouldn’t pass up a guaranteed, risk free 50-100% rate of return. After the match, I wouldn’t invest a penny more.