In investing, choice usually is a good thing. But new research suggests that having too many choices in a 401(k) retirement plan could be costly for participants.
Researchers studied a 401(k)-type plan that reduced the number of mutual funds it offered by close to half. They found that investors who were forced to shift their money out of the funds being eliminated from the plan tended to move into funds with lower fees—even though the funds available after the plan was streamlined had almost exactly the same range of fees as the menu of funds before the choices were reduced.
Read more here.
Researchers studied a 401(k)-type plan that reduced the number of mutual funds it offered by close to half. They found that investors who were forced to shift their money out of the funds being eliminated from the plan tended to move into funds with lower fees—even though the funds available after the plan was streamlined had almost exactly the same range of fees as the menu of funds before the choices were reduced.
Read more here.
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