Financial firms want a bigger piece of the $10 trillion in America’s 401(k) plans, and the Trump administration is planning a regulatory rollback to encourage less-regulated — and often riskier — investments.
TL;DR - They want to allow riskier and more expensive investments into 401(k) accounts.
Many 401(k) options can be pretty crappy as it is now, and as boring as it can be, we need to ensure we understand what we’re signing up for if we don’t expect to be screwed, just as in any other financial situation. Learn the basics of investment saving, set up your own brokerage account, and do a regular sweep of your funds into your personal low fee account as frequently as your employer plan lets you.
Yes, it sucks that they are attempting to remove guardrails, but this shouldn’t be anything new for anyone with a retirement account. If you don’t understand what you are investing in, you’ve already likely failed yourself. Everyone should at minimum be able to understand the terms of your 401(k) policy, know what different asset classes are, and know what expense ratios are. Getting informed keeps us safe. Trusting an employer or financial product salesman is not the way to go.
For anyone wanting to start on basics, from simple to more involved:
From looking at the 5 points in the summary, it sounds like similar advice. It’s been all I needed to do realistically well for myself, and once you set things up, if you’ve been honest with yourself in your risk levels, you set it and forget it for a couple decades, since so many sites let you automate everything.
It really doesn’t need to be hard, I think a lot of people think it’s going to be and just flat out don’t want to learn, even when I try to ELI5 to them. I’m honest with them and will show them my balance and holdings to show I’m not blowing smoke, but I don’t know if anyone but my wife and ex have ever listened, and even then I think it was just so they didn’t need to listen to it anymore. 🙄
TL;DR - They want to allow riskier and more expensive investments into 401(k) accounts.
Many 401(k) options can be pretty crappy as it is now, and as boring as it can be, we need to ensure we understand what we’re signing up for if we don’t expect to be screwed, just as in any other financial situation. Learn the basics of investment saving, set up your own brokerage account, and do a regular sweep of your funds into your personal low fee account as frequently as your employer plan lets you.
Yes, it sucks that they are attempting to remove guardrails, but this shouldn’t be anything new for anyone with a retirement account. If you don’t understand what you are investing in, you’ve already likely failed yourself. Everyone should at minimum be able to understand the terms of your 401(k) policy, know what different asset classes are, and know what expense ratios are. Getting informed keeps us safe. Trusting an employer or financial product salesman is not the way to go.
For anyone wanting to start on basics, from simple to more involved:
Short 15 page starter guide
Bogleheads Wiki
Bogleheads’ Guide to Investing
Seconding Bogleheads’ general advice. I’ve recomended The Investment Answer, which gives broadly the same advice.
From looking at the 5 points in the summary, it sounds like similar advice. It’s been all I needed to do realistically well for myself, and once you set things up, if you’ve been honest with yourself in your risk levels, you set it and forget it for a couple decades, since so many sites let you automate everything.
It really doesn’t need to be hard, I think a lot of people think it’s going to be and just flat out don’t want to learn, even when I try to ELI5 to them. I’m honest with them and will show them my balance and holdings to show I’m not blowing smoke, but I don’t know if anyone but my wife and ex have ever listened, and even then I think it was just so they didn’t need to listen to it anymore. 🙄