Mull options, even if 401(k) offers low fees

YeBu in the MediaPosted on March 2nd, 2012No Comments

Janet Kidd Stewart, writing in the Chicago Tribune on the question of whether it makes sense to roll your old 401(k) to an IRA, thus avoiding plan administration fees, observes that such benefits must be balanced against loss of access to the low-cost institutional-class mutual fund shares found in many employer plans.  She quotes Dave on the alternative strategy of assembling a low-cost ETF portfolio in your IRA:

Though you’d pay more to replicate your 401(k) with identical mutual funds in an IRA, because the IBM plan gets institutional pricing, you could instead use exchange-traded funds to gain access to the same asset classes with lower expenses and no 401(k) compliance costs, said Dave Yeske, a financial planner and co-founder of wealth management firm Yeske Buie.

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