Thursday, March 26, 2009

Overheard @: 401(k) matches are 'wasted money'

In a column last Sunday in the Austin-American Statesman, commentator Scott Burns wrote:

"Most employers and workers don't realize it, but employer matching contributions are often wasted money. In the long term, investment expenses gobble up the employer contributions. Basically, those employer contributions don't go to the employee; they go to the financial services industry as fees for managing the money."

Click here to read the entire column and the hypothetical examples Burns uses to make his point.

What's your view? Are 401(k) matches a waste? How can fees be readjusted so that all contributions -- from employers and employees -- are more valuable? Comment and let me know.

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