I found a great article yesterday on marketwatch.com titled, “What You’re Really Paying in 401(k) and IRA Fees.”
I am not shocked by the AARP survey quoted in the article. In my experience, the percentage of 401(k) company retirement plan participants who know anything about their annual fees is much too low.
“The AARP survey found that 65% of participants thought that they paid no fees at all, and only 17% stated that they do pay fees; 18% said that they just didn’t know. Another 83% didn’t know how much they pay in fees, and 54% responded that they did not understand the impact that fees can have on long-term investment performance.”
This article covers the three main categories of 401(k) plan fees and expenses; administration, service, and investment fees. There is also a great explanation of the ever-present 12b-1 fees found in every company 401(k) retirement plan mutual fund.
A close examination of the fees and expenses is always the best place to begin the analysis of your company 401(k) retirement plan account. The next best place is to monitor the investment performance of each mutual fund option.
Ric Lager
Lager & Company, Inc.
