What you don’t know can be costly – which is why you should be familiar with the ins and outs of your retirement savings plan.
Such plans include individual retirement accounts, 401(k) plans and other retirement savings vehicles.
You probably know such vehicles have some fees – but do you know what those fees are and how much they are?
Many American investors are unaware of the fees they pay their retirement plan providers.
In fact, a recent study by the AARP found that 71% of 401(k) plan participants think they don’t pay any fees, and 6% don’t know.
That’s a total of 77% of American investors who are misguided.
Annual maintenance and account termination, or account transfer fees, are perhaps the most common retirement plan fees.
Depending on what share class of mutual funds you own in your account, you may also be assessed a fee called a contingent-deferred charge as well.
That’s not to say all retirement plan fees are bad. Your plan provider has to be compensated somehow. But the question is, are the fees too much?
The good news is that starting Jan. 1, 2012, retirement plan providers will have to disclose the fees participants pay for their 401(k) plans.
Meanwhile, there are also many calculators that can help you determine what you’re paying in retirement plan fees.