401K Help

[kstarm]

My wife started a new job about 6 months ago and now is able to invest in her company's retirement plan. I am not excited about their set-up or options
but I imagine it is still going to be the best deal to max it out.

Here are the fees associated with the plan:

There is a 1% AUM Fee (called a program administrative charge)
A $25 a year plan participation Fee
A $50 per withdrawal Fee (this doesn't specify if it includes once she hits retirement age)

There is a 5% match

All of the funds have a between 1-1.5% expense ratio. Our current plan is for her to go ROTH 401k and all stocks

Basic Stats:

Age: 40s for both of us
His Salary: 450K
Her Salary: 72K

Maxing his 401k, 457b, backdoor roths, HSA, 10k x2 per year for 527s. Kids ages 15 and 13. Retirement is about 85% stock and 15% bonds. There is currently about 900k in the retirement not including the 527s. Like most, these are all down a lot so far this year.

Debts: 320k left on the mortgage, 50k on student loans.


Questions:
1. I am not excited about the AUM and fees that her account is offering. I don't think there is any other better place for her money but if people have thoughts I would love to hear them.
2. We are recently married and I am trying to figure out the best way to determine if we should file together or separately come tax time. I still need to comb through WCI, but if someone has a good way to go about figuring it out that would be helpful.
3. Of the funds listed does it matter that much? I was going to recommend a mix of the small-cap and international as it didn't look to me that there were any clear winners.


The options with ER

Real Estate
Investico Real Estate R (1.53)

International
AB International Value (1.88)
American Funds Cap World Growth and Income (1.52)
American Funds EuroPacific Growth R1 (1.57)

Small Cap
Fraklin small cap value R (1.34)
Putnam small cap growth R (1.46)

Mid-Cap
AB Discovery Value R (1.55)
Fidelity Advisor leveraged Company Stock M (1.3)
Lord Abbett Value opportunities P (1.38)
Putnam sustainable future (1.27)

Large Cap:
AB growth R (1.53)
AMerican Funds growth R (1.39)
Franklin growth (1.08)
hartford quality value r4 (0.98)

Invesco comstock R 1.07
Invesco main street all cap 1.38
Invesco value opportunities (1.47)
MFS core equity R2 (1.18)

Then a bunch of JP morgan Target date funds 1.2-1.35

[spiritrider]

You are right, those are some criminal fees and expenses ratios in this day in age. In fact, I would consider this a material breach of the employer's fiduciary responsibility to their employees.

I would only contribute up to the full employer match. At 2%+ all in on fees and expenses, she is better off maximizing a Roth (Backdoor if necessary) and then taxable investments for the rest of your savings rate.

Also, I would be putting a plan on place to get the heck out of there within the next two years.

[litovskyassetmanagement]

Is this a plan for a medical practice or just a company of some sort? Looks like a broker-sold plan where the costs are all paid by the participants. If this is a big enough company, a lawsuit for excessive fees is going to be successful.

[kstarm]

You are right, those are some criminal fees and expenses ratios in this day in age. In fact, I would consider this a material breach of the employer's fiduciary responsibility to their employees.

I would only contribute up to the full employer match. At 2%+ all in on fees and expenses, she is better off maximizing a Roth (Backdoor if necessary) and then taxable investments for the rest of your savings rate.

Also, I would be putting a plan on place to get the heck out of there within the next two years.

Thanks for the reply. We are now looking at taxable after the match instead of all in on the 401k

Is this a plan for a medical practice or just a company of some sort? Looks like a broker-sold plan where the costs are all paid by the participants. If this is a big enough company, a lawsuit for excessive fees is going to be successful.

I am not sure how big it needs to be. It is a local business with multiple locations. I knew the plan was bad, I didn't realize it was this bad though, thanks for the insights!