Mutual fund fees

[spotty_dog]

I was poking around our HSA provider to see what investments are available for that money, if we were to treat it more like a stealth IRA than a health care savings account. There are only 19 funds available, and they run the gamut. I opened the prospectus on some of them and found front loads above 5% and expense ratios above 1% annually! I cringed, gasped, and shut the browser window ASAP, LOL. I only found a few index funds with ERs below .5%, and one bond fund that I'm going to research a bit more -- the .75 ER is a bit rich for my blood, but it might be a nice diversifier for the rest of my portfolio.

Do you suffer from a lack of choices in your company 401k/403b, or your HSA? How do you get around them? I am so grateful for being self-employed and being able to choose our solo 401k provider to be a brokerage with plenty of low-cost options!

[MAPPLEBUM]

You're so funny, I get the sense if some dirty ad popped up you'd be less spooked than that 5%

Our only employer account is my 403(b), which they let me used Vanguard! Off topic, but this account is through a public high school, I'm there a couple afternoons a week. Recently found out that I'm one of TWO employees in the entire school with one. Sure, the teachers probably (?) have pensions but holy shit. The 403b IS the option in place of the 401k and no ones using it.

[spotty_dog]

You're so funny, I get the sense if some dirty ad popped up you'd be less spooked than that 5%

LOL, you know it! ...backing away slowly...

What startled me, I think, was that there was this list of 19 investments and an option to allocate my contributions to them by %age. But I had to dig down several pages to find prospectuses, only to discover these huge fees on most of them. One could easily just choose investments by name, never ask questions, and be paying way too much. :\

Yeah, 403b is almost identical to 401k, it's just sponsored by a nonprofit instead of a business employer. Yay for Vanguard! When I got my 403b at the university they offered Vanguard, TIAA-CREF, and maybe one other. I went with TIAA probably because of the commercials on NPR. It's definitely frustrating when people don't use the savings vehicles that are available to them, since you only get so much space per year in which to take advantage of your tax privileges. But I guess the bills you're dealing with today can feel a lot more pressing than the bills you might hypothetically face in 30+ years. DH once told me that he learned in med school that most people never leave the "concrete" stage of thinking -- abstract thought about stuff that isn't here and now, can be literally impossible for some.

[Ravenclaw]

I just met with DH's 401k advisor and I mentioned how I was disappointed in the high expense ratios. She said they are following new rules that aren't enforced yet where the fees are more transparent so the funds I mentioned preferring which are not available through them may be close in fees. She said she could set up another appointment to go through it with me.

[spotty_dog]

Here's how the SEC requires that fees should be reported: http://www.sec.gov/answers/mffees.htm

The advisor is saying that if there are two funds that advertise very different operating expenses, they are nonetheless somehow equivalent because of something undisclosed? Sounds a little fishy -- that's why the SEC regulates this stuff, right? So we can compare apples to apples?

[Ravenclaw]

Yeah she might be bs'ing me. Interested to hear how she presents her apples to apples comparison.

[metroguy]

hm.. on a somewhat related topic, most resident don't know that their hospitals offer 403b. i didn't know my dw offer 403b until i started googling around.. i ask her and she say she doesn't know.. it took 4 yrs, but she's finally got a 403b plan. to bad, it's late--she miss most of the stock market run.

[spotty_dog]

hm.. on a somewhat related topic, most resident don't know that their hospitals offer 403b. i didn't know my dw offer 403b until i started googling around.. i ask her and she say she doesn't know.. it took 4 yrs, but she's finally got a 403b plan. to bad, it's late--she miss most of the stock market run.

I'm pretty sure my DH looked into it and they couldn't offer it because he was not exactly an employee? Or because his program was based in a County not a university? Not sure. Honestly, maxing out a couple of Roths and contributing some of his moonlighting money to a solo 401k, was enough savings for us during those tight times!

Anyway, unless your crystal ball is clearer than mine, there's no saying whether there's still more growth to come. I remember being astonished at Dow 15,000 and predicting the end was nigh, and look at us now! Anyway, the power of your investment isn't entirely in the growth -- dividends are part of your return as well, and you can't earn those unless you own the investment, so you might as well get in the market regardless of which way you think it's going.