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For the most part, 401(k) plans have replaced pensions as the prevailing vehicle for people’s retirement. But surveys and studies show some very bleak numbers. The balances in 401(k)s and IRAs may not be nearly enough to pay for comfortable retirements, as the previous generation’s pensions once did. And today, few companies offer pensions.

Why is it possible that 401(k)s and IRAs may not provide as much retirement income as a pension? There are several reasons. First, not all companies offer 401(k) plans, just as some companies did not offer pensions. However, investors who do contribute to 401(k) plans often are unaware of the array of annual charges, such as administration fees, sales charges, management fees, and individual services that they are paying and that are siphoning away their earnings. Fees aren’t “hidden” so much as they’re judiciously disclosed. Many people simply don’t know how or where to look for those fees.

Fees, regardless of how conspicuously they’re disclosed, should be but one criterion you pick for your 401(k) investments. Look at asset class, management’s relative competence, and track record first. Each of them will have a far greater impact on your long-term returns than fees. If you aren’t sure what fees you are paying or how your 401(k) stacks up, seek out the advice of a professional. See how Family Wealth Management can help at www.familywealthadvisory.com.

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