There’s good news and bad news about your 401(k). The good news is that you have one, and you’re well on your way to a financially secure retirement—and we’ll get to more good news later. The bad news is that due to the market downturn (imagine that), investments in this fund have become more expensive.
More Expensive Stocks And Bonds
The New York Times Bucks Blog dives into the specifics of investors’ expenses over the years, and the disparity between stock payments and bond payments. While the facts are all prices that increase less than a percentage point, the bottom line is that 401(k) investments have become more expensive after a five-year price decline.
There’s More Good News!
Despite this rather discouraging change, things aren’t that bad. The Times says that “Despite the increases, 401(k) investors still paid less, on average, than the typical investor.” Did you hear that? It means that investing in your retirement plan is giving you an advantage! Also, investors with money-market accounts are benefitting from a price drop due to firms who waived fees to maintain positive yields. It appears that many investors are making a concentrated effort to seek out no fee, no load funds (hooray!), and that—get this—the Department of Labor should be revising rules in the near future to make comparison shopping between funds easier. Oh, retirement accounts. How we love you.
Tell us in the comments: What do you look forward to doing in retirement?