The Fees Your Pay for Your 401(k)

40% of people don’t know what they pay in fees for their 401(k).

Saving used to be so easy. You went into a bank and handed a teller a deposit slip and money.

Now you need to read the fine print in the statement to know what you are paying in fees in your company provided 401(k) savings plan. But it’s there if you look, says Michael Smith, President of Avidian Wealth. “I’d be surprised that 40% of plan participants don’t understand what they’re paying when it’s right at their fingertips. I would advise that you look harder, but it’s there.”

Smith says it used to be sneaker but law cleared that up not too long ago and plans are required to provide the breakout of fees with statements.

There are two kinds: administrative and investment. The administrative are set and non-negotiable, but the investment fees can vary based on the type of fund, and if you are finding you pay more in fees than you make from the fund, Smith says you need to speak up. “Absolutely. You can. Complain to HR. Get a group of people and say something,” he suggests.

If when signing up for a 401(k) no investment choices are specified, you may be automatically put into a target date fund. Not surprisingly, those can come with the highest fees.

photo: Getty Images

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