Dirty Little Secret #1

Thank you for requesting access.  As promised, here is information on something that negatively impacts 1 out 2 people across the United States in 401(k), 403(b) and 457(b) plans.

Dirty Little Secret #1 – The Separate Account Charge

I made this #1 because it costs Americans more than $1 billion every year.  This charge is found exclusively in retirement plans sold by life insurance companies.  The average charge in the plans I have examined is a gut-punching 1.25%.  The charge in the plan illustrated in the chapter titled “Let’s Tackle The Fees” is a whopping 1.85%.

If your 401(k), 403(b) or 457(b) plan is by a life insurance company, you are forced to pay this insidious fee.  Get a retirement plan that is not by a life insurance company and you won’t have to.  It is that simple. These plans are also often stocked with high-cost investments.

Look for the signs:

  1. Your retirement plan is by a life insurance company.
  2. Look for keywords Group Variable Annuity, Separate Account Charge, Variable Account Charge, Mortality & Expense Charge (M & E).
  3. Your statements value your investments in “units,” not “shares.”

If your organization has this crushing brand of 401(k), 403(b) or 457(b) plan, you can get rid of the high fees by ditching the life insurance company and moving your plan to a 401(k) advisory firm.  Many fee-enlightened employers in both the private and public-sector have made the move and never looked back.

If you are a retirement plan decision maker for your company, know that the total of all fees in your retirement plan should not exceed 0.65%.  This is the national benchmark for ultra-low fees.  Contact me and I will personally analyze your plan’s fees and help you ditch your high-cost plan, whether it is from a life insurance company or any other provider.  We will provide a plan for you with total participant fee of just 0.65%.

If you are a retirement plan participant and are hoping to advocate for your employer to ditch your high-cost plan for a plan with lower fees, we can help you too.  The key is having your information together when you request a meeting with the decision maker.  Contact me and I will personally work with you to get this done.

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Warm regards,

Michael J. Marini