William Bitters Discusses How 401k’s Are the Only Products We Buy That We Don’t Know the Cost Of
We, as tax-paying, hard-working women and men have been taught to believe that one of the most important investments we can make for our financial future is a 401k. To date, Americans have $5.7 trillion invested in employee-sponsored 401(k) plans, according to the Investment Company Institute, and that is about 20% of the total retirement investment pie in America. However, despite their widespread use, most individuals are unaware of exactly how much their 401ks are costing them. To go over everything 401k, we spoke to the President of United Financial Information Services (UFIS), William Bitters. William Bitters has been working in the financial industry for over 34 years and is here to help you make well-informed decisions about your financial future.
What is a 401k?
A 401k is an investment account with much higher annual contribution limits than an IRA, and if your employer offers to “match” this amount, most people consider that free money. For this reason, a 401k is among the most popular type of retirement account in the United States. However, most people don’t realize that there are hidden fees indiscriminately eating away at what people hope to be saving.
Over a third of US investors assume there are no hidden costs with their 401k accounts, and yet almost all 401k investors (roughly 95%), pay fees associated with their 401ks. The average all-in cost of those fees is .45% of the total invested assets. William Bitters explains that the typical 401k investor is a novice, and a list of 20–30 mutual funds that are presented may sound great and important, but the quality might be mediocre. He explains that the 401k is one of the only products that you buy that you probably don’t really know what you are getting into. A 401k/qualified plans are the only instruments that you fund yourself, you take 100% of the risk, you pay 100% of the fees for retirement dollars 25–30 years into the future. There are risks, dangers, and fees that only benefit the mutual fund industry.
William Bitters explains that the 401k prospectus does not list even half of the fees involved, and that is because they don’t have to. Some of these fees include legal fees, trustee fees, transactional fees, stewardship fees, and bookkeeping fees. These fees can add up, and in some cases, have been found to eat away the benefits of 401k. These fees can add up to 50% of the fund over a 30-year period.
The traditional 401k’s are what everyone knows about, and for the most part, have been told that this is the best option. William Bitters explains that if this is a plan you’ve already chosen, you shouldn’t feel badly about what has already happened, but now that we know about those unexpected costs, you can and should start to look at 401k alternatives.
With over 34 years of experience, William Bitters is able to help you plan for your financial future and create a retirement plan that works for you. William Bitters is dedicated to working in the best interest of his clients. His clients, are hard-working individuals, couples, small business owners, physicians, attorneys and CFO’s. They all have the same value to Bill, and they value and utilize his vast knowledge of estate preservation strategies and retirement income planning strategies. If asked, Bill’s clients would say they enjoy working with him because he responds to their questions quickly and keeps complex issues simple. His clients know he will be there for them and always look out for their best interest. Nothing is more rewarding to Bill than to listen to the wants and needs of his clients so that he can challenge himself to offer the solutions that will get them to their goals before, during and after retirement.