Article
3 Retirement Savings Mistakes That Are All Too Easy to Make in a 401
Maurie Backman
- In some cases, it could make sense to pay a higher fee (called an expense ratio) for a mutual fund with a stronger performance history. But if you’re going to pay a higher investment fee, make sure you’re getting something in return. If given the choice between a mutual fund and an index fund with comparable performance, you may want to choose the one that comes with the lower expense ratio.
- Another option you might find in your 401(k) is a target date fund. These funds adjust your risk allocation based on how close to or far from retirement you are.
- Like mutual funds, target date funds can charge higher fees that eat into your returns. So it’s important to pay attention before choosing one off the bat.
- A better bet when leaving a job is to see if you can roll your 401(k) into your new employer’s 401(k) if one exists. If not, you can look to roll that money into an IRA.