401K Fees

Here is a list of fees provided by latimes.com 3/27/07 of how these fees breakdown for a low-cost growth oriented investment fund in a 401K savings plan:

Fund management Fees 1.13%

Fund Trading Fees 0.86%

Participation Education Fee 0.75%

Administrative Fee 0.15%

Custodial Fee 0.05%

Audit and legal Fees 0.05%

Total Charges 2.99%

This has been confirmed by subsequent research including Time.com June 4th 2012 stating that, “It isn’t unusual to find 401K plans with total costs paid by the participant exceeding 3% annually.

In a September 7, 2009 Forbes.com article titled “The 401K rethink” David Randall says, once you’re in a 401K there’s no cap on how much the plan might skim off the top in fees, many plans, especially those sold to small companies, can eat up roughly half of real investment returns.”

The $154,794 is 30.3 percent of that household’s retirement balance of $509,644 that is lost to fees.

(Image credit: Demos)

The median 401(k) balance was a scant $23,000 at the end of the first quarter this year among Fidelity Investments’ 11.8 million accounts.

The higher your income, the greater the absolute value you pay in fees.