How to Choose the Best 401k Funds — Why Low Fees Matter and How to Spot Them

00:00:00.000 | Fees are important, and it's worth keeping an eye on, and you're right.

00:00:04.040 | When you go to 401(k) programs, and I think they've gotten better initially, they were

00:00:09.420 | The kinds of choices I'd see in plans that people would bring me, there was no index

00:00:13.380 | option at all.

00:00:14.520 | Now I tell people frequently these plans have scores of funds to choose from, which again

00:00:19.860 | in my world is kind of nonsensical.

00:00:22.440 | Typically you'll have, if you have 401(k), you will be able to get a list of all the

00:00:26.240 | funds they have, and there should be a column on that list of the expense ratios, the ER.

00:00:33.060 | And what I tell people, especially who are not familiar with the different funds, the

00:00:36.600 | way you find the index funds is you put your finger on that column, and you start scrolling

00:00:41.480 | down looking for the lowest number.

00:00:43.880 | And when you start seeing things that are like .05, .04, you've found the index funds.

00:00:50.880 | And then look at those, and you should be able to figure out, oh that's an S&P 500 fund,

00:00:55.760 | or that's a total stock market, if that's what you want.