Maybe you’ve seen the e*trade advertisement recently on retirement savings- the one claiming that you will spend $155,000 on fees over the lifetime of your 401k.  Those numbers are based on a study by, a non-partisan public policy research and advocacy organization.

Demos’s Assumptions

  1. You are part of a two-earner household
  2. You both earn the median income for your age & gender every year from age 25 to retirement at age 65
  3. You consistently contribute- no breaks or decreases in contributions
  4. You gradually increase contributions from 5% of income to 9% by retirement
  5. You invests equally in two mutual funds: one focusing primarily in bonds and one primarily in stocks

Balance @ Retirement

Assuming an average return of approximately 7%,no fees


With fees of about 2% (management and trading fees)


Fees paid over lifetime of 401K


Their conclusion- you can lose up to 30% of your investment returns to 401k fees.  If you make more than the median income, you might be looking at fees of more than $200,000.

Do you know how much you are spending on fees each year and how it affects your bottom line?  If you think your fees are excessive or didn’t even know you were being charged fees, it might be time to talk to an investment advisor.

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