It used to be that no one knew what self-directed 401K plans were, let alone knowing the differences between 401K plans established with one-time fees, plans with transaction fees and the difference between the two. Should one pay a lower fee but continue to pay annual maintenance and transaction fees? That’s up to the account holder. But, one should know that there are different models out there offered by 401K plan sponsors related to fees…including the ability to pay one-time fees and, in theory and most likely in practice, save money in fees over a period of time you have your plan.
I couldn’t illustrate this concept any better than by this humorous video which simply shows the difference between no fees and on-going fees. It is an oldie commercial, but a great one.
What’s really most important for a 401K account holder to remember is whether they SHOULD self-direct their retirement assets. Does one have the discipline to self-direct? Does one have the experience and savvy to invest in non-traditional assets? These are but a smattering of one should ask themselves. The main thing is that you should be educated that this opportunity exists.
As always, the information provided is intended to be educational and informative in nature and is not intended, nor should it be interpreted as, any form of tax, legal, financial or investment advice. You must always consults with your respective professional in all such matters.