Smart 401(k) Investing

Managing Your 401(k)


Fee Overview

401(k) Fact
An increase of 1 percent in your 401(k) plan fees and charges could reduce your retirement earnings by 28 percent.

All 401(k) plans carry asset-based fees and expenses that have a direct impact on your investment return and your long-term financial security. An important part of managing your account effectively is knowing what those fees are, what they pay for and how they affect your return.

The difficulty is that it can be hard to calculate what fees are costing you because you donít pay them directly by writing a check. Rather, they are subtracted before your return is reported. Whatís more, neither the rate at which the fees are figured nor the amount you pay is typically part of your account summary. However, most fees are explained in your summary plan document (SPD). You can also ask your human resources or personnel department for an explanation.

If you discover that the fees you pay are higher than average, thereís little you can do directly to reduce them. However, you might encourage your fellow employees to join you in petitioning for a lower-cost plan.

You can access more information about 401(k) fees and charges from the US Department of Laborís online publication, A Look at 401(k) Plan Fees for Employees.




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