401(k) Fees

Fees are automatically deducted from the plan.  They are hard to find and may go under different names.  Here a few so you may understand the costs associated with your plan.

Administration fees cover the operations of a plan including accounting, lawyers, record keeping, trustee services, seminars, customer service, advisers.  This may be shown as a fee for each service or a total fee.  A tool like Brightscope rates 401(k) plans or try Google to see how your plan is rated.

Investment fees are charges for the sale and management of your funds. You may also have sales fees and commissions, sales load and services.  This is part of the expense ratio.

Fees can kill your return.  If the account earned 7% a year minus 3% in fees, you only net 4%.  Over 30 years, the additional charges can reduce the account balance dramatically.

It may be time to contribute less to the 401(k) if the fees are high and start a low cost IRA.

401(k) Fees
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