In the 25 years I have been in the financial consulting business one thing has remained true--clients want to CUT expenses everywhere they can!

And why not! After all, extra expenses come out of your pocket which means that it really is YOUR money!

Today you’ll learn a terrific way to dramatically slash your 401(k) plan’s expenses so that you can keep more of your hard earned money.

Before we begin, let me assure you that cutting expenses in your 401(k) plan is both practical and necessary. It seems that everyone is discussing cutting these costs. In fact, Congress is holding hearings on what to do about the myriad of very expensive retirement plans that vendors are selling to plan sponsors.

Facts are facts; and the fact is that most plans are far too expensive.

So let’s look at some very specific and practical ways in which you can actually slash your plan’s expenses--beginning today.

Cost Cutting Idea #1 – Know your numbers.

The first step is to know what your current expenses are and to consider the possibility that your plan may be too expensive to keep.

I know changing plans may sound like too much effort, but let me encourage you to stay motivated by thinking about the huge savings you’ll get by cutting your plan’s expenses. The savings can be huge; more than enough to offset any time or effort you make today.

Cost Cutting Idea #2 – Stop paying for advice you don’t need!

Paying for advice is another big expense; especially, if you’ve been sold an expensive plan to begin with.

Are you still paying someone to advise you not to slash your plan’s expenses? Why would you do that? Any advisor worth his or her salt will want what is in your best interest, and saving money is definitely in your best interest, isn’t it?

Make sure the advice you receive is in your best interest.

Cost Cutting Idea #3 – Beware the high cost of “free.”

Watch out for the myriad of bells and whistles that vendors provide “free.” If you look just below the surface you will quickly see that “free” comes with a considerable cost!

For example, financial calculators will waste your time and not provide any real value at all. The reason is simple. First, they cannot predict which asset-classes will outperform going forward. Second, they cannot predict how much you will earn on your investments. They simply can’t predict the future!

But take heart, because you can do a great job of planning your own investments without using financial calculators and without using the financial planning software that may only confuse you more.

Always keep it simple.

Cost Cutting Idea #4 – Make basic but profound changes.

Very simply, ask your employer to use a diversified mix of low cost index funds instead of those high cost funds that are in your plan.

Did you know that two of the biggest and most respected mutual fund companies in world only charge 0.07%, per year for index funds? Imagine slashing your costs that low. It could mean thousands, or more, to your bottom line each year!

Another idea: For growth you can use a large-cap blend, mid-cap blend, small-cap blend, and foreign large cap fund that invest in equities (stocks). And for fixed income you can use a Treasury money market fund, short-term Treasury bond fund, intermediate Treasury bond fund, and a long term Treasury bond fund. (A long term Treasury fund is optional, because it will has more risk but also more reward.)

That’s all you need for a well diversified mix of investments!

Cost Cutting Idea #5 – Stop trying to beat the market.

Let me ask you this. Can you hit a moving target blindfolded?

Here is what I’m talking about. Many people are trying to beat the market (hit a moving target) blindfolded. They are blindfolded because no one can predict which asset classes will outperform the others going forward. They are just guessing where the target is. That’s why they miss the mark.

Instead, why not invest in a diversified mix of low cost index funds so that you can match the market’s performance? That way you’ll have more money for retirement and beat the picks of most experts.

Did you know it's a myth that you can predict the future by studying past performance?

No one has ever done it!

Cost Cutting Idea #6 – Choose your advisor carefully.

Many expert’s like to pretend they know which asset classes will outperform all of the others, because they want to sell you their asset-allocation models, or their asset-allocation fund, target-date fund, lifecycle fund, lifestyle fund, or balanced fund.

If you trust their advice, you, too, will probably fail to beat the market. So why would you experiment with your hard-earned money when you can easily match the market's performance with low cost index funds?

And check this out - If you fail to beat the market, your investment expenses will be higher than if you just buy low cost index funds that are designed to match the market’s performance!

What's more, your opportunity cost (failure to match the market) will be greater than you can imagine!
An opportunity cost is measured by your actual return on investment (ROI) compared to how much you would have earned by using low cost index funds.

But wait…there's more.

Ask for the expert’s long term track record over 5, 10, 20, and 30 years. If you ask for a track record, you may find that not one expert has ever picked a mix of managed funds, or asset-allocation, target-date, lifecycle, lifestyle, or balanced funds that beat a diversified mix of low cost index funds. Not one!

Please - never allow an expert to play a guessing game with your money!

The fact is, if you try to beat the market with managed funds, and/or asset-allocation, target-date, lifecycle, lifestyle, or balanced funds, and you fail, it will cost you a small fortune! You’ll have a huge opportunity cost. And you’ll have wasted precious time trying to beat the market!

The bottom line here is simple, yet powerful. You can lower expenses beginning today by taking the simple steps outlined above. And I can guarantee this, use these ideas today and you will be happy you did both today and for years to come!

Author's Bio: 

Frank Cirullo is a twenty-five year financial veteran who teaches students how to have more money; more time; less stress. Easy! For free lessons, visit his Web sites at,, and