Wednesday, January 20, 2010

New Tools for Retirement Planners

The small start-up Brightscope has done it again.  While the tool they originally introduced offered plan sponsors a look at how well their offerings served the needs of those who use the business' 401(k) and plan users the opportunity to confront those sponsors about the adequacy of those plans, a new tool puts more of the information in the employee's hands.

Designed to offer the plan participant a more in-depth look at how their 401(k) plan performs, their new tool, which Brightscope founders Ryan and Mike Alfred suggests is free because you already pay fees, takes the whole process to the next logical level.  Drawing from a database of 30,000 plans, you can, after registering for free, drill down into your personal plan.

The tool asks for your age, salary, annual contribution and plan sponsor.  From there, all that is needed to complete the analysis is the actual funds you own.  This tool profiles not only the fees, expressed as an average across all of the funds listed, but the option to roll it over (if your investments are with a company you no longer work for) to an IRA.

Even if you are not rolling your investment from an old plan to an IRA, the tool will give you greater insight into the real costs of your plan.  These costs are often overlooked, or worse, masked by the plan sponsor.  In many instances, there is little you can do about getting those fees lower short of picking lower cost funds in the plan or complaining to the plan administrator.

But knowledge, as they say, is power.  And if Messrs. Alfred keep doing what they are doing, an uprising among participants can not be to far in the future.

To use the tool, simply go to the Brightscope site and register - as I mentioned earlier, it is free.

Paul Petillo is the Managing Editor of Target2025.com and a fellow Boomer.

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