How do 401k handle rate of return
"Your employer sends the money that you choose to contribute, plus employer match if any, to the administrator of the 401k plan who invests the money as you have directed, choosing between the alternatives offered by the administrator. Typically, the alternatives are several different mutual funds with different investment styles, e.g. a S&P 500 index fund, a bond fund, a money-market fund, etc.  Now, a statement such as ""I see my 401k is up 10%"" is meaningless unless you  tell us how you are making the comparison. For example, if you have just started employment and $200 goes into your 401k each month and is invested in a money-market fund (these are paying close to 0% interest  these days), then your 11th contribution increases your  401k from $2000 to $2200 and your 401k is ""up 10%"". More generally, suppose for simplicity that all the  401k investment is in just one (stock) mutual fund and that you own 100 shares of the fund as of right now.  Suppose also that your next contribution will not occur for three weeks when you get your next paycheck, at which time additional shares of the mutual fund will be purchased Now, the value of the mutual fund shares (often referred to as net asset value or NAV) fluctuates as stock prices rise and fall, and so the  401k balance = number of shares times NAV changes in accordance with these fluctuations. So,  if the NAV increases by 10% in the next two weeks, your 401k balance will have increased by 10%.  But you still own only 100 shares of the mutual fund. You cannot use the 10% increase  in value to buy more shares in the mutual fund  because there is no money to pay for the additional shares  you wish to purchase.  Notice that there is no point selling some of the shares (at the 10% higher NAV) to get cash  because you will be purchasing shares at the higher NAV too. You could, of course, sell shares of the stock mutual fund at the higher NAV and buy shares of some other fund available to you in the 401k plan.  One advantage of doing this inside the 401k plan is that you don't have to pay taxes (now) on the 10% gain that you have made on the sale. Outside tax-deferred plans such as 401k and IRA plans, such gains would be taxable in the year of the sale.  But note that selling the shares of the stock fund and buying something else indicates that you believe that the NAV of your stock mutual fund is unlikely to increase any further in the near future. A third possibility for your 401k being up by 10% is that the mutual fund paid a dividend or made a capital gains distribution in the two week period that we are discussing.  The NAV falls when such events occur, but if you have chosen to reinvest the dividends and capital gains, then the number of shares that you own goes up.  With the same example as before, the NAV goes up 10% in two weeks at which time a capital gains distribution occurs, and so the NAV falls back to where it was before.  So, before the capital gains distribution, you owned 100 shares at $10 NAV which went up to $11 NAV (10% increase in NAV) for a net increase in 401k balance from $1000 to $1100. The mutual fund distributes capital gains in the amount of $1 per share sending the NAV back to $10, but you take the $100 distribution and plow it back into the mutual fund, purchasing 10 shares at the new $10 NAV.  So now you own 110 shares at $10 NAV (no net change in price in two weeks) but your 401k balance is $1100, same as it was before the capital gains distribution and you are up 10%.  Or, you could have chosen to invest the distributions into, say, a bond fund available in your 401k plan and still be up 10%, with no change in your stock fund holding, but a new investment of $100 in a  bond fund. So, being up 10% can mean different things and does not necessarily mean that the ""return"" can be used to buy more shares." A 401(k) is an investment just like any other investment. You generally get two types of return lumped into that number, but there can be more and you should read your funds prospectus carefully. If you aren't investing in direct companies, you're using mutual funds for instance, then you should read the funds prospectus to see how they handle these situations for the underlying securities they hold for you. Although I think this is the basic answer to the question as you asked.
"The interest rate is determined by your 401(k) provider and your plan document.  Of course you may be able to influence this, depending on your relationship with the provider.  I'm very certain that prime+1% is not the only rate that is possible.  However, your provider is constrained by IRC 4975(d), which states that the loan must be made ""at a reasonable rate of interest.""   The definition of ""reasonable rate of interest"" would probably need to go to court and I do not know if it has.  The IRS probably has internal guidelines that determine who gets thrown to the dogs but they would not make those public because it takes away their discretion.  Because of the threat of getting pounded by the IRS, I think you will have a hard time getting a provider to allow super high or super low interest rate loans. Note: I am not a lawyer." $10.90 for every $1000 per year. Are you kidding me!!! These are usually hidden within the expense ratio of the plan funds, but >1% seems to be quite a lot regardless. FUND X 1 year return 3% 3 year return 6% 10 year return 5% What does   that exactly mean? This is the average annual rate of return. If measured for the last 3 years, the average annual rate of return is 6%, if measured for 1 year - it's 3%. What it means is that out of the last 3 years, the last year return was not the best, the previous two were much better. Does that mean that if I hold my mutual funds for 10 years I will get   5% return on it. Definitely not. Past performance doesn't promise anything for the future. It is merely a guidance for you, a comparison measure between the funds. You can assume that if in the past the fund performed certain way, then given the same conditions in the future, it will perform the same again. But it is in no way a promise or a guarantee of anything. Since my 401K plan stinks what are my options. If I put my money in a   traditional IRA then I lose my pre tax benefits right! Wrong, IRA is pre-tax as well. But the pre-tax deduction limits for IRA are much lower than for 401k.  You can consider investing in the 401k, and then rolling over to a IRA which will allow better investment options. After your update: Just clearing up the question. My current employer has a 401K. Most of   the funds have the expense ratio of 1.20%. There is NO MATCHING   CONTRIBUTIONS. Ouch. Should I convert the 401K of my old company to Traditional IRA and   start investing in that instead of investing in the new employer 401K   plan with high fees. You should probably consider rolling over the old company 401k to a traditional IRA. However, it is unrelated to the current employer's 401k. If you're contributing up to the max to the Roth IRA, you can't add any additional contributions to traditional IRA on top of that - the $5000 limit is for both, and the AGI limitations for Roth are higher, so you're likely not able to contribute anything at all to the traditional IRA. You can contribute to the employer's 401k. You have to consider if the rather high expenses are worth the tax deferral for you. I'll be happy to edit when you provide answers to the question I posed in the comments.  Given the choice (and I assume there is no other) I'd take a loan from the 401(k) vs a withdrawal.  You withdraw $40K. I'll assume 25% bracket as you're planning at least a $200K house. Hopefully, your taxable income is above $38K, the 25% line for singles. The tax and penalty is 35% total, federal. You net $26K. And you have $40K less in the retirement account. In 40 years, at 10% average growth, that's $1.8M you won't have in your 401(k). And as littleadv stated, no deposits for 6 months, meaning no matching. There's a few more thousand you'll lose.  You borrow $20K. Your 401(k) will see a return on the $20k that's better than the short bond account, 4-5% vs less than 1%. You are short $6K, but in return have paid no tax, no penalty, etc. I respect those who are strongly anti-loan, but even they would agree, this is the far lesser of 2 evils.   The above is pretty generic, there are better choices. But your CPA friend's advice is nearly as bad as it gets. By the way, the tax you'll save once you have the mortgage has nothing to do with that 10% penalty. Say you bought the house with cash (as many would be happy to do). You'd pay the penalty for the 401(k) withdrawal, but have no mortgage deduction. If you had the 20%, you still have a loan and the deduction, but no penalty for taking his bad advice.  My advice is to take that refund and use it to pay the loan faster. Not applicable.  Or, at least totally unrealistic.  Lots of assumptions about returns, no discussion of time frames, and no discussion of volatility.  If it's a personal choice you wouldn't do it this way, plus there are other factors to consider.  As far as the math of the question, you use a discount rate that allows you to account for alternatives, typically a RFR, but again, that doesn't apply to an individual quite in the same way since it's not a debt vs equity question. It would help if we had numbers to walk you through the analysis. Current balance, rate, remaining term, and the new mortgage details.  To echo and elaborate on part of Ben's response, the most important thing is to not confuse cash flow with savings. If you have 15 years to go, and refinance to 30 years, at the rate rate, your payment drops by 1/3. Yet your rate is identical in this example.  The correct method is to take the new rate, plug it into a mortgage calculator or spreadsheet using the remaining months on the current mortgage, and see the change in payment. This savings is what you should divide into closing costs to calculate the breakeven. It's up to you whether to adjust your payments to keep the term the same after you close.  With respect to keshlam, rules of thumb often fail. There are mortgages that build the closing costs into the rate. Not the amount loaned, the rate. This means that as rates dropped, moving from 5.25% to 5% made sense even though with closing costs there were 4.5% mortgages out there. Because rates were still falling, and I finally moved to a 3.5% loan. At the time I was serial refinancing, the bank said I could return to them after a year if rates were still lower. In my opinion, we are at a bottom, and the biggest question you need to answer is whether you'll remain in the house past your own breakeven time. Last - with personal finance focusing on personal, the analysis shouldn't ignore the rest of your balance sheet. Say you are paying $1500/mo with 15 years to go. Your budget is tight enough that you've chosen not to deposit to your 401(k). (assuming you are in the US or country with pretax retirement account options) In this case, holding rates constant, a shift to 30 years frees up about $500/mo. In a matched 401(k), your $6000/yr is doubled to $12K/year.  Of course, if the money would just go in the market unmatched, members here would correctly admonish me for suggesting a dangerous game, in effect borrowing via mortgage to invest in the market. The matched funds, however are tough to argue against. Let's use an example: You buy 10 machines for 100k, and those machines produce products sold for a total of 10k/year in profit (ignoring labor/electricity/sales costs etc). If the typical investor requires a rate of return of 10% on this business, your company would be worth 100k.  In investing terms, you would have a PE ratio of 10.  The immediately-required return will be lower if substantially greater returns are expected in the future (expected growth), and the immediately required return will be higher if your business is expected to shrink. If at the end of the year you take your 10k and purchase another machine, your valuation will rise to 110k, because you can now produce 11k in earnings per year.  If your business has issued 10,000 shares, your share price will rise from $10 to $11.  Note that you did not just put cash in the bank, and that you now have a higher share price. At the end of year 2, with 11 machines, lets imagine that customer demand has fallen and you are forced to cut prices.  You somehow produce only 10k in profit, instead of the anticipated 11k.  Investors believe this 10k in annual profit will continue into the forseable future.  The investor who requires 10% return would then only value your company at 100k, and your share price would fall back from $11 to $10.  If your earnings had fallen even further to 9k, they might value you at 90k (9k/0.1=$90k).  You still have the same machines, but the market has changed in a way that make those machines less valuable. If you've gone from earning 10k in year one with 10 machines to 9k in year two with 11 machines, an investor might assume you'll make even less in year three, potentially only 8k, so the value of your company might even fall to 80k or lower.  Once it is assumed that your earnings will continue to shrink, an investor might value your business based on a higher required rate of return (e.g. maybe 20% instead of 10%), which would cause your share price to fall even further. If you exceed the income limit for deducting a traditional IRA (which is very low if you are covered by a 401(k) ), then your IRA options are basically limited to a Roth IRA. The Cramer person probably meant to compare 401(k) and IRA from the same pre-/post-tax-ness, so i.e. Traditional 401(k) vs. Traditional IRA, or Roth 401(k) vs. Roth IRA. Comparing a Roth investment against a Traditional investment goes into a whole other topic that only confuses what is being discussed here. So if deducting a traditional IRA is ruled out, then I don't think Cramer's advice can be as simply applied regarding a Traditional 401(k). (However, by that logic, and since most people on 401(k) have Traditional 401(k), and if you are covered by a 401(k) then you cannot deduct a Traditional IRA unless you are super low income, that would mean Cramer's advice is not applicable in most situations. So I don't really know what to think here.) If you put it in a normal account it is (1) taxed as ordinary income now and then (2) any growth is taxed again at the capital gains rate.  Additionally, (3) any dividends will be taxed each year.  If you put it in a 401(k), you will only be taxed once, at the ordinary income rate.   Mathematically, if you start with X and have a regular tax rate of t and capital gains rate of g and your investments return r and there are n years to retirement, then your total wealth if you put it in a mutual fund (ignoring annual taxes on dividends) will be While if you used a 401(k) it would simply be The whole g term (along with any annual taxes on dividends) is gone in the second case and that's potentially a lot of taxes.  The 401(k) is much better in terms of total wealth unless tax rates dramatically rise between now and when you retire so that the t in the second case is much higher than in the first. This is virtually never the case for people retiring now.  Of course, what tax rates the future holds, we do not know. "when you contribute to a 401k, you get to invest pre-tax money. that means part of it (e.g. 25%) is money you would otherwise have to pay in taxes (deferred money) and the rest (e.g. 75%) is money you could otherwise invest (base money).  growth in the 401k is essentially tax free because the taxes on the growth of the base money are paid for  by the growth in the deferred portion.  that is of course assuming the same marginal tax rate both now and when you withdraw the money. if your marginal tax rate is lower in retirement than it is now, you would save even more money using a traditional 401k or ira. an alternative is to invest in a roth account (401k or ira). in which case the money goes in after tax and the growth is untaxed.  this would be advantageous if you expect to have a higher marginal tax rate during retirement. moreover, it reduces tax risk, which could give you peace of mind considering u.s. marginal tax rates were over 90% in the 1940's. a roth could also be advantageous if you hit the contribution limits since the contributions are after-tax and therefore more valuable. lastly, contributions to a roth account can be withdrawn at any time tax and penalty free. however, the growth in a roth account is basically stuck there until you turn 60. unlike a traditional ira/401k where you can take early retirement with a SEPP plan. another alternative is to invest the money in a normal taxed account.  the advantage of this approach is that the money is available to you whenever you need it rather than waiting until you retire.  also, investment losses can be deducted from earned income (e.g. 15-25%), while gains can be taxed at the long term capital gains rate (e.g. 0-15%). the upshot being that even if you make money over the course of several years, you can actually realize negative taxes by taking gains and losses in different tax years. finally, when you decide to retire you might end up paying 0% taxes on your long term capital gains if your income is low enough (currently ~50k$/yr for a single person). the biggest limitation of this strategy is that losses are limited to 3k$ per year. also, this strategy works best when you invest in individual stocks rather than mutual funds, increasing volatility (aka risk). lastly, this makes filing your taxes more complicated since you need to report every purchase and sale and watch out for the ""wash sale"" rules. side note: you should contribute enough to get all the 401k matching your employer offers.  even if you cash out the whole account when you want the money, the matching (typically 50%-200%) should exceed the 10% early withdrawal penalty." "401k plans are required to not discriminate against the non-HCE participants, and one way they achieve this is by limiting the percentage of wages that HCEs can contribute to the plan to the average annual percentage contribution by the non-HCE participants or 3% whichever is higher.  If most non-HCE employees contribute only 3% (usually to capture the employer match but no more),  then the HCEs are stuck with 3%. However, be aware that in companies that award year-end bonuses to all employees, many non-HCEs contribute part of their bonuses to their 401k plans, and so the average annual percentage can rise above 3% at the end of year. Some payroll offices have been known to ask all those who have not already maxed out their 401k contribution  for the year (yes, it is possible to do this even while contributing only 3% if you are not just a HCE but a VHCE) whether they want to contribute the usual 3%, or a higher percentage, or to contribute the maximum possible under the nondiscrimination rules. So, you might be able to contribute more than 3% if the non-HCEs put in more money at the end of the year. With regard to NQSPs, you pretty much have their properties pegged correctly. That money is considered to be deferred compensation and so you pay taxes on it only when you receive it upon leaving employment. The company also gets to deduct it as a business expense when the money is paid out, and as you said, it is not money that is segregated as a 401k plan is. On the other hand, you have earned the money already: it is just that the company is ""holding"" it for you. Is it paying you interest on the money (accumulating in the NQSP, not paid out in cash or taxable income to you)?  Would it be better to just take the money right now, pay taxes on it, and invest it yourself? Some deferred compensation plans work as follows. The deferred compensation is given to you as a loan in the year it is  earned, and you pay only interest on the principal each year. Since  the money is a loan, there is no tax of any kind due on the money when you receive it. Now you can invest the proceeds of this loan and hopefully earn enough to cover the interest  payments due. (The interest you pay is deductible on Schedule A as an Investment Interest Expense).  When employment ceases,  you repay the loan to the company as a lump sum or in five or ten annual installments, whatever was agreed to, while the company pays you your deferred compensation less taxes withheld. The net effect is that you pay the company the  taxes due on the money, and the company sends this on to the various tax authorities as money withheld from wages paid.  The advantage is that you do not need to worry  about what happens to your money if the company fails; you have received it up front.  Yes, you have to pay the loan principal to the company but the company also owes you exactly that much money as unpaid wages. In the best of all worlds, things will proceed smoothly, but if not, it is better to be in this Mexican standoff rather than standing in line in bankruptcy court and hoping to get pennies on the dollar for your work." If ordinary income tax rates and contribution rates to tax-advantaged retirement accounts are held constant, It's net negative to the extent that the average retirement account return exceeds the risk-free rate. Rather than pushing money into Roth accounts, the government could leave traditional 401(k)s unchanged, borrow the difference in up-front tax revenue that it's foregoing by doing so, and repay that debt as the tax revenue from traditional 401(k) disbursements comes in. Net of interest on the additional debt, the latter strategy would increase the government's total tax revenue by an amount proportional to the average excess return of the affected retirement accounts, with essentially no downside (other than messaging) relative to the strategy that's being proposed.  Of course, in reality it's likely that retirement savings rates would decline as a result of the change, so that would partially offset the overall reduction in tax revenue. However, the downsides of reduced retirement savings rates arguably far outweigh that benefit. (That's why tax-advantaged retirement accounts exist in the first place.) Even ignoring the match (which makes it like a non-deductible IRA), the 401k plans that I know all have a range of choices of investment.  Can you find one that is part of the portfolio that you want?  For example, do you want to own some S&P500 index fund?  That must be an option.  If so, do the 401k and make your other investments react to it-reduce the proportion of S&P500 because of it(remember that the values in the 401k are pretax, so only count 60%-70% in asset allocation).  The tax deferral is huge over time.  For starters, you get to invest the 30-40% you would have paid as taxes now.  Yes, you will pay that in taxes on withdrawal, but any return you generate is (60%-70%) yours to keep.  The same happens for your returns. "All right, I will try to take this nice and slow. This is going to be a little long; try to bear with me. Suppose you contribute $100 to your newly opened 401(k). You now have $100 in cash and $0 in mutual funds in your 401(k) (and $100 less than you used to somewhere else). At some later date, you use that money within the 401(k) to buy a single share of the Acme World All-Market Index Fund which happens to trade at exactly $100 per share on the day your purchase goes through. As a result, you have $0 in cash and exactly one share of that fund (corresponding to $100) within your 401(k). Some time later, the price of the fund is up 10%, so your share is now worth $110. Since you haven't contributed anything more to your 401(k) for whatever reason, your cash holding is still $0. Because your holding is really denominated in shares of this mutual fund, of which you still have exactly one, the cash equivalent of your holding is now $110. Now, you can basically do one of two things: By selling the share, you protect against it falling in price, thus in a sense ""locking in"" your gain. But where do you put the money instead? You obviously can't put the money in anything else that might fall in price; doing so would mean that you could lose a portion of your gains. The only way to truly ""lock in"" a gain is to remove the money from your investment portfolio altogether. Roughly speaking, that means withdrawing the money and spending it. (And then you have to consider if the value of what you spent the money on can fluctuate, and as a consequence, fall. What's the value of that three weeks old jug of milk in the back of your refrigerator?) The beauty of compounding is that it doesn't care when you bought an investment. Let's say that you kept the original fund, which was at $110. Now, since that day, it is up another 5%. Since we are looking at the change of price of the fund over some period of time, that's 5% of $110, not 5% of the $100 you bought at (which was an arbitrary point, anyway). 5% of $110 is $5.50, which means that the value of your holding is now at $115.50 from a gain first of 10% followed by another 5%. If at the same day when the original fund was at $110 you buy another $100 worth of it, the additional 5% gain is realized on the sum of the two at the time of the purchase, or $210. Thus after the additional 5% gain, you would have not $210 (($100 + $100) + 5%), nor $205 (($100 + 5%) + $100), but $220.50 (($110 + $100) + 5%). See how you don't need to do anything in particular to realize the beauty of compounding growth? There is one exception to the above. Some investments pay out dividends, interest or equivalent in cash equivalents. (Basically, deposit money into an account of yours somewhere; in the case of retirement plans, usually within the same container where you are holding the investment. These dividends are generally not counted against your contribution limits, but check the relevant legal texts if you want to be absolutely certain.) This is somewhat uncommon in mutual funds, but very common in other investments such as stocks or bonds that you purchase directly (which you really should not do if you are just starting out and/or feel the need to ask this type of question). In that case, you need to place a purchase order yourself for whatever you want to invest the dividend in. If you don't, then the extra money of the dividend will not be growing along with your original investment." "There is a very simple calculation that will answer the question: Is the expected ROI of the 401K including the match greater than the interest rate of your credit card? Some assumptions that don't affect the calculation, but do help illustrate the points. You have 30 years until you can pull out the 401K. Your credit card interest rate is 20% compounded annually.  The minimum payoffs are being disregarded, because that would legally just force a certain percentage to credit card. You only have $1000.  You can either pay off your credit card or invest, but not both.  For most people, this isn't the case.  Ideally, you would simply forego $1000 worth of spending, AND DO BOTH  Worked Example: Pay $1000 in Credit Card Debt, at 20% interest.   After 1 year, if you pay off that debt, you no longer owe $1200.  ROI = 20% (Duh!) After 30 years, you no longer owe (and this is pretty amazing) $237,376.31.  ROI = 23,638% In all cases, the ROI is GUARANTEED. Invest $1000 in matching 401k, with expected ROI of 5%. 2a. For illustration purposes, let's assume no match After 1 year, you have $1050 ($1000 principal, $0 match, 5% interest) - but you can't take it out. ROI = 5% After 30 years, you have $4321.94, ROI of 332% - assuming away all risk. 2b. Then, we'll assume a 50% match. After 1 year, you have $1575 ($1000 principle, $500 match, 5% interest) - but you can't take it out. ROI = 57% - but you are  stuck for a bit After 30 years, you have $6482.91, ROI of 548% - assuming away all risk. 2c. Finally, a full match After 1 year, you have $2100 ($1000 principle, $1000 match, 5% interest) - but you can't take it out. ROI = 110% - but again, you are stuck. After 30 years, you have $8643.89, ROI of 764% - assuming away all risk. Here's the summary - The interest rate is really all that matters.  Paying off a credit card is a guaranteed investment.   The only reason not to pay off a 20% credit card interest rate is if, after taxes, time, etc..., you could earn more than 20% somewhere else.   Note that at 1 year, the matching funds of a 401k, in all cases where the match exceeded 20%, beat the credit card. If you could take that money before you could have paid off the credit card, it would have been a good deal. The problem with the 401k is that you can't realize that gain until you retire. Credit Card debt, on the other hand, keeps growing until you pay it off. As such, paying off your credit card debt - assuming its interest rate is greater than the stock market (which trust me, it almost always is) - is the better deal. Indeed, with the exception of tax advantaged mortgages, there is almost no debt that has an interest rate than is ""better"" than the market." There are several things being mixed up in the questions being asked. The expense ratio charged by the mutual fund is built into the NAV per share of the fund, and you do not see the charge explicitly  mentioned as a deduction  on your 401k statement (or in the statement received from the mutual fund in a non-401k situation). The expense ratio is listed in the fund's prospectus, and should also have been made available to you in the literature about the new 401k plan that your employer is setting up. Mutual fund fees (for things like having a small balance, or for that matter, sales charges if any of the funds in the 401k are load funds, God forbid) are different. Some load mutual funds waive  the sales charge load for 401k participants, while some may not. Actually, it all depends on how hard the employer negotiates with the 401k administration company who handles all the paperwork and the mutual fund company with which the 401k administration company negotiates.  (In the 1980s, Fidelity Magellan (3% sales load) was a hot fund, but my employer managed to get it as an option in our plan with no sales load: it helped that my employer was large and could twist arms more easily than a mom-and-pop outfit or Solo 401k plan could). A long long time ago in a galaxy far far away, my first ever IRA contribution of $2000 into a  no-load mutual fund resulted in a $25 annual maintenance fee, but the law allowed the payment of this fee separately from the $2000 if the IRA owner wished to do so. (If not, the $25 would reduce the IRA balance (and no, this did  not count as a premature distribution from the IRA). Plan expenses are what the 401k administration company charges the employer for running the plan (and these expenses are not necessarily peanuts; a 401k plan is not something that needs just a spreadsheet -- there is lots of other paperwork that the employee never gets to see). In some cases, the employer pays the entire expense as a cost of doing business; in other cases, part is paid by the employer and the rest is passed on to the employees.  As far as I know, there is no mechanism for the employee to pay these expenses outside the 401k plan (that is, these expenses are (visibly) deducted from the 401k plan balance). Finally, with regard to the question asked: how are plan fees divided among the investment options? I don't believe that anyone other than the 401k plan administrator or the employer can answer this. Even if the employer simply adopts one of the pre-packaged plans offered by a big 401k administrator (many brokerages and mutual fund companies offer these), the exact numbers depend on which pre-packaged plan has been chosen. (I do think the answers the OP has received are rubbish).