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Fees that Kill Retirement Plans

Last update on: Mar 15 2020
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Most investors know whether they are buying load or no-load mutual funds. But few investors know how much they’re paying in fees on their retirement accounts, especially 401(k) plans. There are a number of fees imposed on some accounts. They’re disclosed, somewhere. It’s not always easy to find a total for the fees you’re paying. Robert Powell of SmartMoney lists the top 10 fees and expenses, with the help of Denise Appleby of RetirementDictionary.com. Most of them are unknown to many participants.

Many Americans are simply unaware of the fees they pay to their plan providers. More than seven in 10 (71%) 401(k) plan participants incorrectly reported that they did not pay any fees and 6% said that they did not know whether or not they pay fees, according to a recent AARP study.

Of note, AARP launched a 401(k) fee calculator on its web site that aims to help investors better understand 401(k) fees and their potential impact. You have to register to use the calculator, but it’s easy. See the AARP 401(k) fee calculator here.

And come Jan. 1, 2012, plan sponsors will have to disclose the fees participants pay for their 401(k) plans.

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