The 8 Best Retirement Plans to Use in 2018

Fidelity is a longtime leader in the retirement investing industry. If you are lucky enough to have Fidelity as your 401(k) plan provider, you have access to a great lineup of mutual funds and an overall low-cost plan. Fidelity is a large provider with more than $2 trillion under management.

Fidelity made headlines twice recently for adding four no-fee mutual funds to its lineup. If you have these funds in your Fidelity retirement plan, you should jump at the chance to invest with no fund fees. Even if you don’t have access to those four, Fidelity is a leader in low-cost funds that should align well with your retirement goals.

Fidelity clearly puts retirement and long-term financial goals first, which makes it a great partner as you work toward your dream retirement.

Vanguard is a mutual fund juggernaut with over $5 trillion in assets under management. The company is a top retirement plan provider with an average fund expense ratio of just 0.11%. That is a fraction of the industry average 0.62% fee, according to Vanguard.

For the largest mutual funds by assets under management, Vanguard holds position #2 through #7 on the top 10 list and 13 of the largest 25 funds overall. It is really tough to beat Vanguard when it comes to low fees for broad market funds.

Vanguard is the long-time leader in low-fee funds. It's also a trusted name in investment and a pioneer in the low-cost index fund investment model.

Schwab is another top retirement plan company with over $3 trillion total under management. Schwab gives Vanguard a run for its money when it comes to low-cost mutual funds and ETFs. In recent years, Schwab has cut its average expense ratio to a rock-bottom 0.03%.

The biggest retirement providers look very similar when it comes to fees and funds, but Schwab is a step ahead when it comes to the average index fund cost. Schwab is also a great bank and investment company, which makes it a good choice if you want to keep all of your dollars under one roof.

ForUsAll is a retirement plan provider that is also a newcomer to the industry. But they came in with fresh ideas and aggressive pricing to undercut the typical small and midsize 401(k) provider with low-fee investment choices. Advisory fees range from 0.35% of assets to 0.20% based on the size of the employer’s plan.

For employers, ForUsAll is a bargain. Businesses pay just $200 per month for plans up to $250,000 in assets and no fees for larger plans. This friendly and low-cost provider is great for independent businesses that don’t want the costs or hassles of the giant providers. And employees will be thrilled with the low fees and risk-sensitive investment options.

Merrill Edge is the discount brokerage brand of Merrill ​Lynch, and offers competitive retirement plans for companies of all sizes. For large plans, Merrill Lynch ranked #2 in customer satisfaction in a J.D. Power & Associates survey, just behind Charles Schwab.

Unlike the top three on this list, Merrill does not offer its own branded mutual funds and ETFs. Instead, you’ll most likely end up with funds with names like Fidelity, Vanguard, Schwab, Blackrock, or T. Rowe Price in your portfolio. Specific funds vary by employer.

Formerly TIAA-CREF, this full-service finance company has its roots in education. TIAA scores well in customer satisfaction rankings and the majority of their mutual funds score 4 or 5 stars at Morningstar. TIAA is a low-cost investment provider beating out the cost of 81% of comparable investments, according to TIAA.

Unlike some retirement plan providers, TIAA takes a holistic view of your finances to help you get the best long-term results. TIAA recently branched out to add banking and other financial products to its lineup. You can expect to read about this plan provider more in the coming years.

Best known as the first big robo-advisor, Betterment expanded in 2016 to offer 401(k) plans under the banner Betterment for Business. Advisory fees are fixed at 0.25% and expense ratios average 0.10%. Employers pay $4 to $6 per employee per month depending on the size of the business. But low costs are not what makes Betterment unique.

Your investment selections at Betterment are made by computers. You don’t have to know anything about mutual funds to succeed. New employees fill out a short survey explaining investment goals and risk tolerance and Betterment takes care of the rest.

While you may be nervous to hand over your investment selections to a computer, Betterment and similar companies use complex algorithms built by investment experts. Your funds get allocated into one of a handful of portfolios that most closely aligns to your unique needs and goals when it comes to your retirement savings.

Silicon Valley startup Human Interest doesn’t look a lot like its New York counterparts, and it takes pride in working to disrupt an industry known for confusion and high fees. Just like online banks offer lower fees than traditional banks, Human Interest operates as an online retirement plan with very low costs.

Ideal for small businesses, Human Interest offers a mix of traditional mutual funds and target date funds from low-cost providers like Vanguard. Employers pay $120 per month + $4 per employee. Participants pay 0.50% per year to Human Interest and funds have an average 0.08% expense ratio. Human Interest makes 401(k) plans for small businesses cheap and easy.