Fees can make a significant difference. According to the Labor Department, paying just 1 percentage point more in expenses over the course of 35 years could reduce a worker’s retirement savings by nearly 28 percent. Consider a worker with a 401(k) balance of $25,000 who earns 7 percent over the next 35 years. If this person paid 0.5 percent in fees, even if she stopped making new contributions, her account would grow to $227,000 at retirement. But if she paid fees totaling 1.5 percent, her savings would rise to only $163,000, or 28 percent less.
Posted on: Sat, 22 Jun 2013 22:26:45 +0000