Minimizing 401(k) Fees and Penalties
Darcy Bergen has presided over the Bergen Financial Group for more than 15 years. In this role, Darcy Bergen employs strategies to help workers nearing retirement protect their 401(k) investments from excessive fees and hidden costs.
With strategic planning, 401(k) account holders can transfer or withdraw their balance without incurring additional fees. For example, the 10-percent early withdrawal penalty is eliminated if the account holder is older than 59 1/2 or has become unemployed after the age of 55. At this point, it may be more financially beneficial to invest a portion or the entire 401(k) in an investment fund with an expense ratio under 1 percent.
If an account holder does not qualify for the early withdrawal penalty waiver and his/her employer’s 401(k) fees are over 1.5 percent, experts advise contributing only enough to receive an employer match and investing the remainder in Individual Retirement Accounts (IRAs). Employees should also become familiar with their 401(k) fee disclosure statement and ask human resources to substitute high-cost funds with more affordable ones.
