401(k) Plans
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401(k) Plans
A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts.
Elective salary deferrals are excluded from the employee’s taxable income (except for
deferrals).
Employers can contribute to employees’ accounts.
Distributions, including earnings, are includible in taxable income at retirement (except for qualified distributions of designated Roth accounts).
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Related SitesInvestment Advice and Asset Management  Together we can protect investments from economic turbulence, and build future income:  is a financial advisor with the serving Greenville and Dayton, Ohio area since 1983.  Contact me:? If you’re a participant in a 401(k) plan and need help.? If you believe the “set it and forget it” approach may not be the path to growing and protecting your investments. ? If you are looking for individualized 401(k) guidance. ? If you are looking for education on how to allocate your investments. ?If you are frustrated with the default mutual fund options. ? If you have given up paying attention to your company 401(k) retirement plan account.I provide guidance with the goal to profit in up markets and protect in down markets.  My core belief: 1. We don’t know where the market will go and neither does anyone else 2. Wherever the market goes, it will get there by trending 3. Along the way, there will be out performers and under performers.  Armed with these three core beliefs and by identifying market trends, we can determine our market exposure, and add out performers to your portfolio. Set up your FREE 30 minute strategy session and find out if 401(k) Participant Help is right for you! The FREE strategy session includes:             ● A quick assessment of your current 401(k) plan             ● A discussion on some of the options available to you             ● An action step that you can take to increase your 401(k) peace of mind Contact me by completing “Have A Question?” and indicate you would like a free strategy session.  We can meet in person, on the phone or on a Skype video call.2 Programs Designed to Help Manage Your 401(k):Investment Advice● We discuss your investment goals and determine your risk tolerance. ● We review a copy of your company 401(k) retirement plan statement/plan menu. ● We will build your personal investment portfolio based on your risk tolerance and available investment choices. We determine a personal quarterly asset allocation with instructions for you to enter through your online account or instructions to give your account provider. ● We will schedule appointments with you as necessary to answer any questions and to discuss your complete financial picture. Cost: $175-$1,295 per year with payment due after your first 3 month free trial. Active Asset Management● We discuss your investment goals and determine your risk tolerance. ● We review a copy of your company 401(k) retirement plan statement/plan menu. ● We will build your personal investment portfolio based on your risk tolerance and available investment choices. We will then continue to monitor it making sure it is appropriately allocated. ● We perform daily monitoring of your investments through our research and associated companies’ research to ensure your portfolio continues to work for you. ● We continue to monitor any new investment choices as they arise, making sure your portfolio is invested within the best investments available.                    ● Portfolio reports and quarterly statements are available via internet or by mail. Access to your account via the internet is also available 24/7. ● We will schedule appointments with you as necessary to answer any questions and to discuss your complete financial picture.Cost: $15-250 per month 
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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG, LLC, to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
Advisory services are offered through Creative Financial Designs, Inc., a Registered Investment Adviser, and Securities are offered through cfd Investments, Inc., a Registered Broker/Dealer, Member /, 2704 S. Goyer Rd., Kokomo, IN  46902. May Financial Group, Inc. is not affiliated with cfd Investments, Inc. or Creative Financial Designs, Inc.Copyright ©
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Rob Berger is a litigation attorney and the founder of&, a personal finance and investing blog. His work focuses on helping people achieve financial independence through smart spending and sound investing.
He currently writes for Forbes, U.S. News and Huffington Post, and produces a&. He is also the founder and editor of, a website focused on credit card and banking deals.
He lives with his wife of nearly 27 years in Northern Virginia. They have two children, a son in the Marines (Oorah!) and a daughter in college. When Rob isn't writing about personal finance, he can be found singing the Ohio State Buckeye fight song, cursing on golf courses throughout the Mid-Atlantic, or playing tournament chess (where he curses under his breath).
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The Supreme Court recently heard arguments in a case about 401(k) retirement plans.
raises questions about an employer's duty to offer low-cost options in a 401(k). While the decision in the case is several months away, it brings into focus an important issue for those saving for retirement.
To help employees assess their workplace retirement plan, here are seven signs that your 401(k) is less than stellar:
1. No Employer Match
The best 401(k) plans offer matching contributions. Paid by the employer, these contributions match a portion of the money employees contribute to their 401(k). For those plans that offer an employer match, a typical program matches 50 cents of every dollar contributed by the employee, up to a maximum of 6 percent of the employee's compensation.
2. No Roth 401(k)
While extensive media coverage has popularized the Roth individual retirement account, some employers also offer a Roth 401(k). While the two are similar, there are some key differences. A Roth 401(k)'s maximum contribution is the same as a regular 401(k) ($18,000 in 2015), which is much higher than a Roth IRA contribution limit ($5,500 in 2015). In addition, your income can't disqualify you from a Roth 401(k) as it can from a Roth IRA.
One benefit of a Roth 401(k) is that it enables employees to save more toward retirement. While the contribution limit is the same as a regular 401(k), the Roth account grows tax free. As a result, you won't have to share some of your retirement account with the IRS when you retire.
3. No Index Fund Options
The lack of index fund investment options is a clear sign that a 401(k) is second rate. Passive investing with index funds beat most actively managed funds over the long term, according to this . Index funds generally are less expensive than actively managed funds. Further, picking actively managed funds requires significant analysis that most individual investors would rather avoid.
4. Expensive Index Fund Options
While index funds are generally an inexpensive way to invest, there are . One ought not assume that all index funds are sound investment options. Rydex, for example, offers an S&P 500 () index fund that charges 1.57 percent of assets under management. These fees rival many actively managed funds and are a far cry from the 0.20 percent or less fees found with many similar index funds.
5. Expensive Target Date Retirement Funds
Target date retirement funds are an easy way to invest. TDR funds create an asset allocation plan based on your the anticipated retirement date and adjust the allocation as you near retirement. Vanguard offers several low-cost TDR fund options. Not all mutual fund companies, however, offer low-cost options. In fact, some 401(k) plans use target date funds with hefty fees. While low-cost funds can have expense ratios of about 20 basis points or less, more expensive options can cost 100 basis points or more.
6. Expensive Actively Managed Fund
While index funds should be a part of every 401(k) plan, there is still a place for well-managed, low-cost actively managed funds. Unfortunately, many retirement plans are saddled with funds that cost a small fortune. As a general rule of thumb, look for actively managed funds that cost less than 100 basis points. The best actively managed funds, in my opinion, have expense ratios in the 60 to 70 basis point range.
7. Administrative Fees
Last but not least, a 401(k) that charges its participants an administrative fee is a clear sign employees are getting a raw deal. This is typically the result of an employer unwilling to foot the bill for its own retirement plan. These are best avoided if possible, particularly given that there are
that don't charge comparable fees.
If your 401(k) plan is less than stellar, consider letting your HR department know how you feel. Here's a
with tips on how to approach your employer about an expensive 401(k) plan. While changes to your plan won't happen overnight, there are .
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