a) We spent about $5000 to set up with an attorney.
b) It's a !@%!@ nightmare to deal with the guy, with the taxes, etc. I would estimate 20 - 40 hours of set-up time for me, 1hr a month of ongoing paperwork and administration.
c) It's at LEAST $2500/yr to administer with the variety of little fees.
d) It's not straightforward for employees.
So suffice to say at $90/mo + $4 per this is a compelling offer.
Don't see anything specific about a "switching" opportunity - get yourselves a "switch to us" landing page and send me the link :)
The really scary thing is this whole page - https://captain401.com/investment-philosophy
I for one don't want a startup investing my retirement fund. I just want to see a list of names that I know (Vanguard, Goldman Sachs...) that I can choose from. If you are providing regular funds as options I would make this abundantly clear and I would push your own investment strategy to the backburner. The core value-add that you are offering is making 401Ks easier for businesses.
In a world where Bernie Madoff existed, it'd be almost irresponsible to invest retirement savings with a startup. That being said, WealthFront and Betterment are basically startups, but they seem to be at a different level of maturity.
Of course, I'm not sure how objective my perception is. Would a more credible looking website be all the difference?
This is true and something we set out to fix at Justworks. Because we are a PEO we have tons of small customers that get access to 401k much earlier in their life cycle as a business than they would otherwise. For instance, we have some 2 person startups using Fidelity funds (as well as Vanguard etc.). The space is definitely ready for some innovation, though, so it's nice to see a YC company working on it.
I see another poster mentioned myubiquity.com which I was just looking at yesterday. One thing that stood out for me there is the questionnaire that a startup plan can go through to setup a plan. Gives them things they need to think about if they haven't already.
Best of luck Captain401! I like the use of the Vanguard index funds. We use those a lot (and in Vanguard managed trusts) and think that is a great decision to go with.
I just applied for the fellowship with an idea that leverages the 401(k) as a distribution channel for automated financial planning. Basically a portal that aims to deliver "financial wellness" to participants that combines budgeting, calculators, savings goals, facilitation of insurance and wills, etc. The portal would be offered to RIAs and plan sponsors as an add on service to their existing 401(k) service.
I hope that by getting better advice to people that addresses their current situation and their goals that we can help them form good financial habits. Retirement is the end goal but getting the people that live paycheck-to-paycheck a solid foundation right now will help them better be able to save down the line.
Some companies will hit participant assets for all fees for the plan and then end up paying nothing themselves. I really dislike that practice as it kind of takes a lot of the benefit out of the benefit. :)
Don't know if they would come out lower than Captain401 though (no mention of any cut of the overall assets on the Captain401 page, if that's correct, they're very likely lower priced).
Is that advisory only? I don't see any mention of that including recordkeeping and custodial services in that fee but do see them on another page.
So there's only one (1) fund to available? I don't think that's necessarily a bad thing, but, if that's the case, what's the reasoning behind this?
Our 401k actually offers dozens of Vanguard funds, and companies can even customize the investment options if they wish.
Fee rate for company 401k? 1.56%.
Fee rate for previous company's 401k? 1.8% plus monthly account fees plus rebalancing fees.
Finally a topic on HN that I can speak about!
Would be great if someone would offer self-directed 401k plans. In theory, they exist, but in practice, they're nowhere to be found.
They have no clue what self-directed means, who to contact at the 401k provider, and aren't really interested in making more work for themselves.
Simply getting some paperwork forwarded along to the provider took a couple of months.
Unless you're a C-level exec, it ain't gonna happen.