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Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

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Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#2

Post by greattypo »

This is awesome. I've experienced first hand the hassle of setting up a 401k for employees (and now appreciate why so many companies don't offer it until they're bigger). In my mind, it would be a strictly better world where all companies could offer this benefit.

Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#3

Post by SilasX »

Great that they're doing this! I especially like their philosophy here [1] about favoring index funds. Way, way too many employers give you a poor selection, loaded with actively-managed ones -- my last major employer did.

(Even better would be for the law to not limit employee 401k choices to ones selected by the employer, based on some misguided belief that they benefit from having the same choices as the "highly paid employees", as required by the 401 code, given that those very executives don't actually rely on 401ks for retirement and thus have little incentive to get the choices right ... but hey, you gotta work with what you have.)

[1] https://captain401.com/investments

Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#5

Post by tyre »

We're a Captain401 user at Seneca Systems and it is fantastic.

We can offer a 401k program despite being a small company plus they integrate with Gusto so I have to do nothing to actively maintain it.

#TheDream

As a founder, this goes beyond just another benefit. Supporting your employees' long-term financial future is really important. Maybe early employees make a few hundred million, but far more likely your company will fail. In that case, they shouldn't have lost years of savings potential.

Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#7

Post by bradleyjg »

Their pricing looks very good. But very small companies may also want to look into SIMPLE IRAs. They are less flexible in terms of employer contribution options (basically 3% match to a max of $12.5k or 2% unconditional to a max of $5,300) and have lower employee contribution limits ($12.5k) but involve far less paperwork and tend to have considerably lower fees.

Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#8

Post by SilasX »

sguha wrote: post #6

https://captain401.com/pricing How do these financial services justify charging a percentage of the funds managed? Is there more work involved in handling an account with a larger balance?

They're competing with other 401k plans that do the same, but charge a much bigger percentage, and mutual/index funds do, in general, charge a percentage of the funds under management. Don't look a gift horse in the mouth.

However, you're right that costs are less-than-proportional to funds under management, so they usually offer to lower the percentage as you invest more, cf. Vanguard admiral-class shares: https://investor.vanguard.com/mutual-funds/admiral-shares

Re: Captain401 (YC S15) raises $3.5M to help more businesses offer a 401k

#10

Post by sguha »

SilasX wrote: post #8
sguha wrote: post #6

https://captain401.com/pricing How do these financial services justify charging a percentage of the funds managed? Is there more work involved in handling an account with a larger balance?

They're competing with other 401k plans that do the same, but charge a much bigger percentage, and mutual/index funds do, in general, charge a percentage of the funds under management. Don't look a gift horse in the mouth. However, you're right that costs are less-than-proportional to funds under management, so they usually offer to lower the percentage as you invest more, cf. Vanguard admiral-class shares: https://i…

Our company used Ubiquity https://www.myubiquity.com/retirement/plans/expressk/ which doesn't have asset based fees
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