If You Can: How Millennials Can Get Rich Slowly

by William J. Bernstein

A frequent problem with 401(k) plans is the quality of the fund offerings. You should look carefully at the fund expenses offered in your employer’s plan. If its expense ratios are in general more than 1.0%, then you have a lousy one, and you should contribute only up to the match. If its expenses are in general lower than 0.5%, and particularly if it includes Vanguard’s index funds or Fidelity’s Spartan-class funds (which have fees as low as Vanguard’s), then you might consider making significant voluntary contributions in excess of the match limits. For most young savers, fully maxing out voluntary 401(k) contributions (assuming you have a “good” 401(k) with low expenses) and the annual Roth limit will get them well over the 15 percent savings target.