I left a comment on WhiteCoatInvestor, a finance blog geared towards doctors (and the site that has pretty much single-handedly galvanized me to take control of my finances), asking advice for how to figure out how good the funds in my retirement account are, and how to figure out what fees I’m being charged. He responded and said,
“They’re required to give you a fee disclosure form every year now- so read it. Also ask for the plan document (your employer is required to provide it if you ask) and actually read it. Look for all the fee and expense ratio disclosures. “Excellent” is < 0.20% ER and no additional fees. “Good is < 0.5%” and minimal fees. Bad is > 1.0% and all kinds of fees.
You can look up the funds in your plan at Morningstar.com. Like most plans, you’ve got some good ones and some bad ones, but enough good ones to just use those and surely be able to get a reasonable asset allocation. Hint- Vanguard and DFA are usually the ones you want to use.”
I logged into my retirement account portal and was able to find all of my funds’ expense ratios, and sure enough, the lowest was a Vanguard fund with an ER of 0.02% and the highest was one of my Transamerica funds at 1.02%. That’s a huge difference! I re-allocated funds from very high ER funds to lower ER funds, still trying to stay somewhat diversified. See the screen shot of all my funds below, with the expense ratios listed on the most right hand column:
Although I still am totally unsure of what I’m doing, I think that I’m inching in the right direction. April shared a page about the wisdom of simple investing, that seems to corroborate the choices I’m making (by people way smarter and more educated than I). Next step? Reading my plan from cover to cover to see what fees I’m being charged.
Over the past week I have had pretty involved conversations with 6 smart ladies regarding retirement, investing and finances in general as a result of the blog. I love it! I’m learning so much and feel a lot more empowered to keep inching forward in my financial life. I hope you guys are, too. I would encourage anyone reading this blog to post their questions and resources here so that these conversations can be public, for others to learn from, as well! Also, I am going to be starting this book, in case anybody wants to get it and read along with me for discussion purposes.
P.S. Isn’t that selfie of my husband at the top cool? 🙂