401(k): Don't Ignore the Fees
The following commentary is from an investment professional with Clear Harbor Asset Management who is a participant in TheStreet's expert contributor program.
NEW YORK (TheStreet) -- Interested in learning more about the fees that are coming out of your 401(k) retirement savings account?
The good news is that the Department of Labor is imposing new rules soon requiring Wall Street firms to provide more transparency about the fees they charge employers and their workers on 401(k) accounts.
Fingers in the PieThere's little doubt that the rise of 401(k) accounts has been a bonanza for the financial industry. The Internal Revenue Service first began allowing workers to contribute their own money to the accounts on a tax-deferred basis in the early 1980's. By 1990, 401(k) plans had about $900 billion in assets, and by 2011, that figure had reached $4.3 trillion. During that period, the proliferation of 401(k) accounts dramatically increased the amount of stock market risk that was being shouldered by the average U.S. household. Meanwhile, a series of speculative bubbles culminated in the global financial crisis and the notorious government bailouts for major financial institutions like AIG (AIG), Bank of America (BAC) and Citigroup (C), leaving major stock indices with their worst long-term performance in modern memory.
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