For many years, my husband has been putting money into a retirement account through his employer, the University of Massachusetts.
He was able to choose from one of six companies, and within the one we chose, there were 81 funds that covered different market sectors: international, domestic, balanced, specialty, etc. (more if you include so-called “target retirement” funds). All our choices had very low expense ratios, which matters at least as much as a fund’s performance.
Recently we were notified that all our money is being moved — against our wishes — to Fidelity, where there are only 18 funds covering fewer sectors, and with expense ratios that are double, triple and up to eight times those of the company we chose.There is no doubt in my mind that we will have less money at retirement because of this; my financial advisor initially called it “very strange,” and went on to say that it’s hard to see how this could do anything but hurt us.
The only two possibilities are that the people who imposed this decision on us are either incompetent or corrupt. Neither is a particularly pleasant thought.
Lisa Kosanovic
Amherst