Fidelity Trade Commissions & Recordkeeping Fees Question

[401Killer]

I have two old 401k plans in Fidelity that total about $100,000 right now and are setup as target date funds. My question is that I'm seeing multiple "Trade Commission" charges a day pop up on my Mint account for these. On Apr 1st alone I have received 5 separate charges for "RECORDKEEPING FEE" totaling $21.25. Is this normal charges or is this similar to the evil "Let us help you manage your funds" charges? One account I have set to SCHWAB MGD RET 2040 fund.

I guess the big question is should I move these funds to my current active 401k account with Merrill Lynch or just move my investments to the Vanguard Intermediate-Term Bond Fund Index I learned about below?


*Edit - It appears that I can rebalance my account to 4 options, one includes Vanguard Intermediate-Term Bond Index Fund. Looking at the fees between the 4 below (not surprisingly) Vanguard's are crazy low compared to the others.


FID TOTAL BOND      
VANG INTM BOND INST      
J H ENTERPRISE N      
AF GRTH FUND AMER R6      

[YttriumNitrate]

In addition to rolling over the old 401k into your new 401k, you might have the option of rolling your old 401k into a traditional IRA.

[reeshau]

The exact fee structure depends on your company's plan.  For example, the company could pay the administration fee, or decide it should be paid by participants.  If your old 401k has the BrokerageLink option, you can find out the total of these fees directly, since fidelity can't bill to BrokerageLink funds directly, and instead takes them out of the funds in the plan options.  My former megacorp's admin fees were .11%, which was tacked on to everything; quite a difference, if you are indexing, but a relatively small plan fee.

https://www.employeefiduciary.com/blog/fidelity-401k-fees

I suspect that the trading fees may be because you have non-fidelity funds in your account, but that's a guess.  I assume you are reinvesting dividends?  Of course, fidelity should be able to tell you those, and provide a detailed statement.

If your current 401k has better fund choices, that could be an option.  There are also degrees of flexibility that a 40k has, but an IRA does not.  (e.g. penalty-free withdrawals starting at 55, if you leave that company at that age)  But an IRA will avoid those group management fees, and of course every major platform has funds that are perfectly fine.

[MustacheAndaHalf]

If you have concerns about expense ratios in an old 401(k), and Vanguard is barely represented at all, I'd roll it over to a Traditional IRA.  You're moving pre-tax money to another pre-tax account, so I would not expect you to owe taxes.

Do you want to stick with Fidelity, which was willing to charge you those fees?  There's Schwab and Vanguard if you want to switch.

[401Killer]

My main question is are those charges pretty normal? To have 5 in one day? Or is that the result of simply picking the wrong setup/higher fee investments? I'm starting to think it's just the fees of the individual investments that the 2040 fund goes into. I think my best option is to just move it into my current 401k plan to consolidate it all and reap the benefits of the bigger principle.

[YttriumNitrate]

My main question is are those charges pretty normal? To have 5 in one day? Or is that the result of simply picking the wrong setup/higher fee investments? I'm starting to think it's just the fees of the individual investments that the 2040 fund goes into. I think my best option is to just move it into my current 401k plan to consolidate it all and reap the benefits of the bigger principle.

Every 401k plan charges record keeping fees, it is just a matter of who pays for them. Depending on how the 401k plan is set up, either the employer will pay the fees or the employees/plan participants will pay the fees. Before moving the money over to the new 401k plan, it would probably be a good idea to check on the fees charged by the new plan.

[reeshau]

My main question is are those charges pretty normal? To have 5 in one day? Or is that the result of simply picking the wrong setup/higher fee investments? I'm starting to think it's just the fees of the individual investments that the 2040 fund goes into. I think my best option is to just move it into my current 401k plan to consolidate it all and reap the benefits of the bigger principle.

It wouldn't be surprising to see a fee applied proportionally to each holding you had, with a record of each one.  Do they occur on the same day each month, or each quarter?

[EvenSteven]

My main question is are those charges pretty normal? To have 5 in one day? Or is that the result of simply picking the wrong setup/higher fee investments? I'm starting to think it's just the fees of the individual investments that the 2040 fund goes into. I think my best option is to just move it into my current 401k plan to consolidate it all and reap the benefits of the bigger principle.

Yes, it can be normal. My 403b plan has a 0.4% administrative fee that I have to pay. I have 4 funds in there, and each fund gets charged each quarter, so I will get charged on 4 days in a year, and each of those days will have 4 charges on it. But it all adds up to 0.4% per year.