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401(k) Charges Are Coming To A Theater Near You

New rules about 401(k) charges finally surfaced from the Department Of Labor last month.  Since 401(k) plans have become one of the largest assets owned by U.S. households today, the whole idea behind these rules are to help consumers have a good idea about the fees charged in these retirement plans.

Beginning January 1st, 2012 your statements will have a whole new look laying out most of the fees and charges in plain language. The new regulations will affect about 483,000 retirement plans and 72 million workers who will be able to gain a better feel about what they are paying for in the plan.  (source: www.miamiherald.com)

The details may be able to help investors fill a big void because many people don’t know about the litany of fees that may be charged against their 401(k) account for recordkeeping, investment advisory, brokerage, or other administrative services. Sometimes, as many as 6 to 8 indirect fees and expense can be charges which are often shaved off the top before investment gains.  One percentage point in fees will reduce overall retirement income by 28% over a lifetime. (source: Department Of Labor)

Having done this business for 20 years, most 401(k) plans today are sold when the owner of your company has a friend in the financial services business.  Often, the companies don’t shop three or four 401(k) plans, but rather pick a plan based upon the personal relationship that they have with the broker. Unfortunately, this often leads to 401(k) plans littered with proprietary mutual funds, poor individual service, and additional fees tacked on to the plan to pay the broker.

There is no free lunch for investing, and hopefully this legislation will allow 401(k) participants a better idea of what they are paying for with their precious retirement assets. Make sure to open your statements, and take a peek at what is going on with your retirement money when 2012 comes around, and ask your employer here in 2011 to get you a plan with lower costs so you too can retire early!!

oXYGen Financial, Inc. co-CEO Ted Jenkin  is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.

Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder oXYGen Financial, Inc.
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Phone 1.800.355.9318 or 770.777.0427

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About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves

Hey!

My friends and family all think I’m a workaholic, but I say I’m just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

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Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation. 

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