When the ideas that would eventually evolve into 401(k) plans were presented, they painted a rosy picture for American workers. All we had to do was put our hard-earned money into a fund and everything would be fine. Among other things, we were told the lie of professional 401(k) management.
The lie of professional 401(k) management is that fund managers are interested in your financial security. In my book 401(k)aos I write:
“With financial freedom tucked away under the watchful eye of these trusted financial companies, we could turn our focus to working hard in the here-and-now. The future was taken care of by people smarter than we are and who cared about us.”
All you have to do is look closely at your 401(k) plan statements to see how much those managers really care. Most mutual funds included in 401(k) plans charge you between 1 and 2 percent of the fund’s assets — the Expense Ratio —
Compare the funds’ returns to any major index to see if the professional advice you’re getting is worth it. And don’t be fooled by comparisons to Lipper benchmarks, that only compares your fund to similar funds, not to any external measurement.which translates to millions of dollars of our money.
Then there’s the company that manages your company’s accounts. Don’t even try to figure out how much they’re charging you.
“…reality is proving to be entirely opposite than expected. That future we dreamed of is in serious jeopardy for most people.”
Professional 401(k) fund managers are only interested in your money as long as it makes more money for them. Anything else they tell you is the lie of professional 401(k) management.