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401(k) and John Hancock

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ACTIONpack    491

My company has started a 401(k) plan for all the employees and they choose John Hancock. The company will match contribution of 20% each year until the 5th year which will be at 100%. The company only have about 40 employees. I have only work here for about 7 months and I don't know if I would stay for 5 years. I'm 35 years old (just to point that out.) I found about that John Hancock has one of the highest yearly interest fee aka administration fee of 1.8% in total. Over time it can add up and take about 20% of your investment in 25 years. I went on a few forum about people complaining about John Hancock high fee and wish they could use Vanguard instead because they have one of the lowest fees in 401(k). I'm pretty new to this and does anyone know about 401(k) and/or John Hancock high fees?

 

I have started to use STASH and Robinhood app to start investing and I put money in there each week. So I have started to invest for my retirement. Just to point out that I'm doing something.

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BritBronco    89

dont turn down the free money from the company fees or not. If you move jobs you roll the 401k into what every the new place offers.

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ACTIONpack    491
1 hour ago, BritBronco said:

dont turn down the free money from the company fees or not. If you move jobs you roll the 401k into what every the new place offers.

The free money don't start until next year and it's only 20% and to get the 100% match from my company, I would need to stay there for 5 years and I don't see that happen. Which is my I need advice about this with people that have 401(k) and/or use John Hancock. Because those fees can take up 30% of your investment and that's just planting it on a mutual fund that is use by all other clients.

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Nick H.    9,990
1 hour ago, BritBronco said:

dont turn down the free money from the company fees or not. If you move jobs you roll the 401k into what every the new place offers.

This.

 

In Switzerland part of your salary goes towards your pension, health insurance and your unemployment benefits. You then have the option of going for a "3rd pillar" whereby you put money aside and it doesn't get taxed until you pull it out. If you take it early you get penalized, but you still have every month of that money stashed away tax-free.

 

I digress. The point is, if my understanding is correct, an American 401k is similar insofar as it is money that you're saving for the future. If a company is planning on matching your contribution to that, it's a no-brainer. You take it, because whatever you submit they (the company) will submit a certain amount as well.

 

Also, if you do leave the company before the 5 years, that money should go in to a separate account that the next employer feeds into.

 

As a question, since you seem concerned, why do you think you lose on this? For me this sounds like a day-to-day thing, but perhaps the US do things differently.

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ACTIONpack    491
58 minutes ago, Nick H. said:

This.

 

In Switzerland part of your salary goes towards your pension, health insurance and your unemployment benefits. You then have the option of going for a "3rd pillar" whereby you put money aside and it doesn't get taxed until you pull it out. If you take it early you get penalized, but you still have every month of that money stashed away tax-free.

 

I digress. The point is, if my understanding is correct, an American 401k is similar insofar as it is money that you're saving for the future. If a company is planning on matching your contribution to that, it's a no-brainer. You take it, because whatever you submit they (the company) will submit a certain amount as well.

 

Also, if you do leave the company before the 5 years, that money should go in to a separate account that the next employer feeds into.

 

As a question, since you seem concerned, why do you think you lose on this? For me this sounds like a day-to-day thing, but perhaps the US do things differently.

Damn, wish I wish we had the Switzerland plan. Anyway, my issue is that the 1.8% administration fees is really high because John Hancock fees is one of the highest (more so that the  company is about 40 employees which they can charge more for the fees) and the matching does not kick in until 12 months from now and it's only 20% at first. I don't know if I will last that long in the company.

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