view transcript

How can people protect their 401ks?

The issue with 401ks is we are dependent upon the choice of providers our employer chooses. Now our employers are well intentioned. But they've got his or her heads down running the business and the kind of look at the 401k plan as a checkbox item, it's not. We try to have you realize it's a real thing, it's a living thing, it's your money most importantly. So the protection really becomes, did your employer make the best possible choice? Unfortunately, a lot of small business owners are told they don't qualify for low cost investments, or a really low cost plan. That's really not true. It's a matter of the provider saying we can't make enough money off of your plan, so we're going to charge more. Any company, whether it's five employees starting a 401k plan for the first time, or one with 550 million in it, can have the lowest possible investments, again well under one percent, in our case just 0.60 percent total investment related fees. We can't control the market, the things that happen in the market day to day seems for no reason in particular why it happens, we have to live with it, we can control the fees we're paying on our 401k plan, which will certainly erode it over time. So if you're a participant, for example, we've created a website called showmethefees.com. Where any participant, and hundreds each week send us the fee disclosure for their 401k plan, we do an analysis for them. If your plan is great we'll tell you. Sadly it's a two or three out of every 200 we can say that. For the rest, we give them some empirical evidence that they can share with their employer. So now their employer who again wasn't paying attention to a review of their 401k plan often has the largest balance, and therefore the most to lose, now is given evidence by an employee for something that can change for the good of everybody in the plan. So you can protect it by sending your fee disclosure to a company like for us, and have a look at it, get a diagnosis. In medical terms they call it the ideology, what's the underlying cause of something going on. We wanna do a diagnosis. And if there's something that should occur to make it better you wanna do that right away, just like you would do for your own health.

While your employer might have the best intentions, it doesn't mean that your 401(k) plan is the best suited to you. 

Tom Zgainer, CEO at America's Best 401(k), sat down with TheStreet to discuss the retirement savings plans.

"The issue with 401(k)s is we are dependent upon the choice of providers our employer chooses. Now our employers are well intentioned. But they've got his or her heads down running the business and the kind of look at the 401(k) plan as a checkbox item, it's not. We try to have you realize it's a real thing, it's a living thing, it's your money most importantly. So the protection really becomes, did your employer make the best possible choice? Unfortunately, a lot of small business owners are told they don't qualify for low cost investments, or a really low cost plan," said Zgainer.

"That's really not true. It's a matter of the provider saying we can't make enough money off of your plan, so we're going to charge more. Any company, whether it's five employees starting a 401(k) plan for the first time, or one with 550 million in it, can have the lowest possible investments, again well under one percent, in our case just 0.60 percent total investment related fees. We can't control the market, the things that happen in the market day to day seems for no reason in particular why it happens, we have to live with it, we can control the fees we're paying on our 401(k) plan, which will certainly erode it over time," he continued.

You can watch the full interview here

Are you heading to retirement in 2019? If so, sign up for Retirement Daily and be sure to follow Mr. Retirement, Bob Powell, on Twitter @RJPIII.

Want More From Robert Powell? Read Ask Bob.

Follow us on Twitter @TheStreet; TheStreet: Investing Strategies on Youtube or check out our podcasts on SoundCloud at TheStreetLive.