With how low fees have gotten, I think the more likely and more damaging situation is that where people's employers have negotiated much worse pricing for their captive audience. I wouldn't give 0.08% vs 0.037% a second thought any day. That's only difference of $400/yr on $1M!

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specialp 3 days ago | parent | next [-]

The real mover for lower retirement plan fees was lawsuits. There have been loads of 401k excessive fee class action lawsuits and this got almost every employer negotiating to avoid this. Of course there's some plausible deniability in some cases but there is something on the other side against that https://hallbenefitslaw.com/401k-excessive-fee-class-action-...

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paxys 3 days ago | parent | prev [-]

Compound it over 30+ years and even those few bps add up to a significant amount.

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dangus 3 days ago | parent [-]

Not really. If you start with a million dollars it’s adding $400 a year and compounding beyond that. But the median person doesn’t have that much in their portfolio…well, ever.

For most people micromanaging below 0.01% is like gaining a cup of coffee every year.

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paxys 3 days ago | parent [-]

The question was - I don't understand why people keep money in their old 401k accounts.

The answer is - there are situations where it is favorable to do so. It may or may not be favorable for you, and it may or may not be favorable for the median person. But these situations exist. And everyone can check for themselves and make the best decision insted of arguing over a blanket "X is better" or "Y doesn't make sense".

	▲	dangus 3 days ago \| parent [-]
		Sure, I agree with that general sentiment, but I think there’s probably a ~90% chance that you should rollover somewhere else.