Plan Fees Make a Huge Difference in Your Retirement

So many smaller 401ks (under $10 million in assets) don’t pay enough attention to 401(k) fees. But having total fees that are 1% higher can make a huge difference in your retirement funds.
 
For example, if you currently have $50,000 in your 401(k), earn $50,000 a year and put in 6% of pay that your company matches, in 30 years you will have $2,189,082 if you compound at 10%. But if your plan expenses are 1% higher than they should be, you will have $1,769,436 instead. Your company not being diligent enough about fees cost you $419,646! And, you are only one participant.
 
The Dept. of Labor has said they want plan sponsors to review and benchmark their fees on a regular basis. Many don’t do it, especially smaller plans.
 
One way to check your fees is to look at the annual fee disclosure they are required to give every participant once a year, sometimes called a 404a(5). Send it to a 401(k) specialist like me and have them look it over.
 
Another way is to go to Brightscope.com, an independent data source on 401(k) plans. Look at their rating of your plan’s costs. If they rate them as High, you really need to take action and call a retirement plan consultant like me. It could make a substantial difference in the size of your retirement investments.

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