401(k) Fee Sticker Shock: What to Do After The New Disclosure Statements

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To get the most out of your plan, you should:

• Be sure you know how it works. Chances are your company has given you literature on this. If you've lost it, get another set. What are the investment choices the plan offers? What's the maximum contribution you can make out of each paycheck, and up to what amount will the company match it? (The company match is free money toward your retirement, so be sure to take advantage of it.)

• Ask yourself: Given these limits, what the right contribution level (aka funding level) is for you, considering your monthly obligations. Are you spending money on unnecessary items that you could be investing in your retirement plan? Most people are, and they're unaware of the amount that they need to invest to have enough for retirement. Funding levels is a subject that plan providers don't like to address because employees might be discouraged from participating if they realized from the beginning how much they'd have to carve out of each paycheck. It's up to you to confront this issue. Tap into available resources for learning about these plans in general.

• Educate yourself about investing objectives, including asset allocation (spreading your investments over different types of assets) to boost average returns. Make sure your portfolio is diversified by not investing in too many funds that own the same stocks or similar types of companies (e.g., companies of the same size or in the same industries). You can probably get much of this information from your employer, but don't hesitate to investigate further by going to websites that can explain it.

• If your plan is deficient, work with your employer to try to improve it, possibly by putting it out to bid to find a new provider. Your company is the consumer, and many providers would be happy to sell it a plan.

• Become versed in how your other financial circumstances affect decisions you make regarding your plan, such as when you intend to start drawing Social Security payments and whether your spouse has a plan at work. If your spouse isn't using his or her plan, this might mean they're giving up substantial matching money. If they are using the plan and taking advantage of the match, what investments do they have? Are they the same basic ones that you have in yours? If so, the two plans combined may lack the necessary diversification.

Remember, every employer sponsoring a plan and every company providing investments for or services to it is responsible to you as a plan participant, but they're not responsible for you. Ultimately, you are responsible for the choices you make regarding your plan. In this sense, you are your own financial advisor. Do as diligent a job as possible to serve yourself and your family.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Anthony Kippins is president of Retirement Plan Advisors, Ltd. a Registered Investment Advisory firm that addresses the needs of retirement plans and the employees who invest in them. An Accredited Investment Fiduciary Analyst (AIFA®) with more than 30 years of experience domestically and abroad, Kippins specializes in providing fiduciary advice to retirement plans on governance, investments and educational services. He also advises individual clients on retirement planning and investment management after retirement. Kippins serves as managing director of Institutional Fiduciary Assurance LLC, an organization that provides fiduciary advice to trustees of endowments, foundations, non-profit organizations and charitable trusts. He can be reached at rpa@retirementplanadvisorsltd.com.

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