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My 401k - Me vs. the Professionals

February 14th, 2013 at 02:58 am

So my 401k likes to try to upsell me to the managed investments program versus my current do it myself. They ship me glossy, pretty brochures showing me what my current strategy produces in retirement income versus what their plan would provide me. They really should get a live person on the review board.

The last time they sent me a comparison, I was only contributing 10%. As a result, my plan only beat their plan by about $3k in retirement income per year (after all, I don't have to subtract their fees from my do it myself plan). This time, I am contributing 20%. They expect my current plan to make almost twice theirs in retirement income (my husband wants to frame that page).

You see, the managed program will never pull more than 10% of a person's income. Hard for them to compete with my larger contribution. So while they have a couple of questions at the bottom of the graph to ask those few whose current plan beats their plan if they are risking more short term loss (probably, but at my age, I should be) and whether I am willing to change my allocation on my own as I near retirement (why yes, I am), all they are really illustrating is that I am doing fine on my own and would do much worse with them.

4 Responses to “My 401k - Me vs. the Professionals”

  1. scfr Says:

    Heh - I get the same or similar slick mailings! Mine wants to charge 1% of "assets under management" annually for their service. Thanks but no thanks!

  2. LuckyRobin Says:

    Big Grin Yes, they really do need a live person checking those things before they send them out.

  3. Jerry Says:

    Ha! That's hilarious. "You're kicking our butts, please consider using us to help you lead your net worth DOWNWARD from where it could be." You would think they would have some insurance of a computer setting to avoid embarrassing themselves like that... nice going to you for beating them at their own game, by the way! Smile Jerry

  4. baselle Says:

    That's great. I once stopped a 403B show and tell when the manager of our accounts told us that asset allocation was key. I raised my hand and said, "I thought the amount that you put in every paycheck was key." Wah wah WAhhh. He had to admit that I was right. Smile
    FYI, I'd frame that and put it above where you bill pay, do your taxes, etc. Encouragement like that doesn't come too often.

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