Lindsey Millar, editor of the Arkansas Times, published a thoughtful, well-written story on 401(k) retirement plans. We'd highly recommend it even if we weren't quoted in the piece.
'If you're among the 79 percent of American workers whose employers offer a 401(k)-style retirement plan, you may have a foggy memory of someone, maybe in HR, explaining the plan to you. It's possible that soon after you heard "401(k)" your eyes crossed and you started daydreaming about lunch. Even now, you may be close to abandoning this article because you can tell there are going to be numbers involved. But first read this: If you are not putting money away in a 401(k) or some other retirement vehicle, you will regret it one day.'
'"Everyone seems to feel like they're supposed to know more than they do," he [Aptus Partner Tim Quillin] said of investing in 401(k) plans. "We don't have any problem going to other professionals, to doctors or lawyers, but when it comes to this area, a lot of people feel like, 'I can figure out those fund choices, no problem.' They say, 'Bonds, oh yeah, I've heard of those, I need bonds, or 'Growth, yeah, gimme some growth.' " Or they get lost early in the process and make random selections. Complexity, apathy and embarrassment are three of the main forces of evil working in the 401(k) ecosystem, Quillin says.'
'Aptus sees the typical 401(k) plan as almost obsolete. It's working to reinvent the model. Sarah Catherine Gutierrez founded the Little Rock firm in 2011 as "a response to how the rest of the industry gives advice." Most financial services companies take money from clients, invest it for them and charge a percentage fee on that investment — or assets under management. Another, increasingly popular model is to invest clients' money for them on an hourly, fee-only basis. Rather than holding and investing clients' money, Aptus recommends a financial plan and directs its clients to execute the plan themselves. For its advice, Aptus charges a flat fee or hourly rate.'
Again, we'd recommend reading the entire article. The quality of your retirement may depend on it.
If you're not familiar with your 401(k) fees, please seek the help of your 401(k) administrator to fill out our Know Your 401k Fees Worksheet.