"The benchmark for low-cost index investing is now almost zero. If your 401(k) holds index-style funds charging more than 0.5%, you are paying far more than necessary for the same market exposure."
"Actively managed funds charge more and, over long periods, most underperform their benchmark indexes after fees. If your 401(k) menu shows mostly fund names with words like 'Growth,' 'Opportunity,' or 'Select,' your plan may be steering you toward higher-cost products."
"Staying in a low-yielding default option while equity markets compound is one of the most expensive passive decisions a retirement saver can make."
Many 401(k) accounts may appear healthy but can be losing value due to structural issues. High fees are a significant concern, especially if the expense ratio exceeds 0.5% when low-cost index funds are available. Actively managed funds often underperform their benchmarks, leading to potential losses. Default options, typically low-yielding target-date funds, can also hinder growth, especially when equity markets are performing well. Awareness of these factors is crucial for retirement savers to avoid compounding losses over time.
Read at 24/7 Wall St.
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