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What Are 401(k) Fees Costing You?

Quinn Buchanan / February 8th, 2016

Your retirement fund might be taking a larger hit than you realize from 401(k) fees. The government has tried to put rules in place to increase fee transparency, but these rules haven't done much to increase consumer awareness.

A 1% fee might seem like a small amount, but over a lifetime it certainly adds up. A lower fee could save you hundreds of thousands of your retirement savings.

Determining how much is too much to pay for fees can get tricky. Some financial experts suggest paying more than 1% is too much—and that half a percent would be ideal. Others say that fund growth must also be considered because a better return could negate the cost of fees.

You can use online tools to compare costs of different plans and see how funds stack up. Morningstar offers a fund comparison tool, and Zurel's free website, FeeX, analyzes the fees associated with specific IRA and 401(k) portfolios.

Source: U.S. News



 

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