Setting up our account and transferring our 401(k)s over to the ShareBuilder platform was ridiculously easy and everyone we spoke to every step of the way was incredibly helpful. After discussing our business with us and what we were looking for, our rep sent over a page detailing the mutual funds in our current plan, the fees we were paying and how much we could save over five years. Here’s a hint: employer and employee combined savings number in the thousands.
After you fill out your paperwork, there are reps to help you every step of the way, including reps from PAI, the plan’s administrator. It was all so easy, in fact, that the hardest part was gathering our old 401(k) account information and sending it over to ING. [How to Prepare for Retirement With ETFs.]
ShareBuilder and BlackRock aren’t the only businesses working to make ETFs a staple in 401(k) plans. Vanguard uses index mutual funds in its own 401(k)s; perhaps ETFs won’t be far off. WisdomTree created a business unit in 2007 that delivers 52 ETFs to the 401(k) marketplace. A number of small businesses, such as Invest n’ Retire, have been the early adopters of ETFs in retirement plans, but once larger companies and corporations join in, the growth may really take off.
Many of the larger providers have shut down the idea of using ETFs on a 401(k) platform. The argument is that ETFs are not suitable for long term retirement savings. On the contrary, lower fees could mean the difference between an okay retirement and a very nice one over the long term.
The rush to get ETFs into more 401(k) plans is increasingly important. Assets in such plans are estimated to grow 41% by the end of 2014, to $3.7 trillion in assets. ETFs currently account for between $5 billion and $10 billion of 401(k) assets.
For more stories about ETFs, visit our Retirement category.