Thursday, February 26, 2004
Take employer match, even if choices weak
Q.My employer offers a simple IRA. It matches the first 3 percent. This is great, but the only fund company it offers is John Hancock Funds, with class A, B or C shares and horrendous yearly expenses. Should I invest anyway to get the match? Or should I leave it alone...
A. Hancock funds aren't much to write home about, are they? Still, I wouldn't give up on the plan. Remember, it has the match. If you put in 3 percent of salary, your employer will double it. Then John Hancock will work on taking some of it away.
But do the math. If you contribute $1,000 a year, your employer will match it up to 3 percent of wages. If you invest in A shares, you'll pay the front-end load with your employer's contribution, reducing the expense ratio over B shares.
John Hancock Classic Value A shares, for instance, will get nicked...
Q.My employer offers a simple IRA. It matches the first 3 percent. This is great, but the only fund company it offers is John Hancock Funds, with class A, B or C shares and horrendous yearly expenses. Should I invest anyway to get the match? Or should I leave it alone...
A. Hancock funds aren't much to write home about, are they? Still, I wouldn't give up on the plan. Remember, it has the match. If you put in 3 percent of salary, your employer will double it. Then John Hancock will work on taking some of it away.
But do the math. If you contribute $1,000 a year, your employer will match it up to 3 percent of wages. If you invest in A shares, you'll pay the front-end load with your employer's contribution, reducing the expense ratio over B shares.
John Hancock Classic Value A shares, for instance, will get nicked...
