How Much Does Your 401(k) Cost You?

Many workers around the country participate in their company’s 401(k) plan.  While these are great vehicles to save money toward retirement, they are often loaded with high expenses and hidden fees.  This artice in the Wall Street Journal reviews what kind of information to look at when selecting mutual funds in a 401(k) plan and what to look out for.  While not necessarily groundbreaking news, the author mentions to be on the lookout for high expense ratios, 12b-1 fees, and short term trading costs.

Here’s an excerpt:

You may not realize it, but you could be paying thousands of dollars a year in fees on your 401(k) retirement account, hidden expenses that affect how your savings will grow. The government is now trying to expose those charges so you can make better investment decisions.

Under regulations proposed by the Department of Labor, 401(k) plans every year will have to disclose each investment’s annual expense ratio — the percentage that goes to management and other costs — along with more detailed performance data. In addition, any administrative or other fees deducted from your account will have to be spelled out. New regulations may go into effect as soon as Jan. 1.

Matt / Google+

One thought on “How Much Does Your 401(k) Cost You?

  1. Hey, I really like this article. I have been hearing a lot of information about using your companys 401k plan and how it can be detrimental to your savings. I agree with you 100 percent and I’m glad you wrote an article about this because it is something many people are unaware of. However, what plan of action do you recommend for avoiding these hidden coasts? What about if you don’t know much about stocks?

    Thanks!

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