Retirement: Why rolling over old 401(k) to an IRA may not be best idea

[Music] that there are those workers who are considering making a shift in their retirement accounts turns out it might be costly to be moving things I mean what what more can you tell us there yeah this was so interesting to me Pew charitable trust came out with this study that looked at uh the basic advice we tell people we've you know that you always hear of your switching jobs don't forget to you know roll over your 401k or 403b to an IRA account you know your individual retirement account where you have more control over it and more you know investment opportunities and you can continue to add to it but what they found out Pew found that in fact the fees and this is something a lot of people don't think about is what the fees charge for your when you roll over to an IRA even if it's the exact same mutual fund will charge higher fees in your account in your IRA because it's a retail account you're an individual it's not that same mutual fund in your employer plan was an Institutional fee and so that tends to be lower and that fee which is your expense ratio that's what you look for is the expense ratio that's marketing and management fees now a big company can negotiate for lower fees for those institutional fees so the point is it may be less expensive and over time it seems like these are little just small increments but it's a big impact over time they looked at one example that was someone that had you know over 25 year period the exact same mutual fund that was in a retail account and an Institutional uh had a ten thousand dollar higher you know cost of fees in the retail uh fund so what the point is people need to pay attention to the fees do your research um finra.org f-i-n-r-a.org allows you to do some research on what those fees are it's really important

Channel: Yahoo Finance

Views: 13,483

Keywords: Yahoo Finance, Personal Finance, Money, Investing, Business, Savings, Investment, Stocks, Bonds, FX, Currencies, NYSE, Equities, News, Politics, Market, Markets, Yahoo FInance Premium, Stock market, retirement, 401K, yahoo finance

Id: tCs_2Xsr5dc

Length: 1min 54sec (114 seconds)

Published: Wed Oct 19 2022