The reasons for using exchange traded funds (ETFs) in a retirement portfolio go on, and here is another. Passing 401(k)-fee-disclosure legislation should be a top priority for Congress, a New York Times editorial informs, reports Joe Morris for Ignites. Investors must know what fees are being charged and why, and they should be itemized. This could also change the current law, in that as of now, employees don’t have to be told about fees that ultimately cut into their investment returns.
The industry has no consistent standard for disclosure and employers are often left with too little information regarding the plans they are offering. Another goal is to present the information in a manner that is meant to inform rather than confuse.
Mutual funds continue to play a dominant role in 401(k) plans. Perhaps with ETFs in these plans the employer and employee would know more about the fees, as ETFs tend to have lower expense and no hidden fees.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.