plan, but are often blind to the other fees that are also tacked on. All in all, employees in small and mid-size company plans are often subjected to paying two to four percent in fees annually on their 401(k) account balances. There’s no need for this to exceed one percent for everything. By staying below the one percent threshold, employees can accumulate tens if not hundreds of thousands of dollars more in savings over a thirty year career.
What are the other fees? Beyond fund expenses, employees in a plan often pay for record keeping, asset management, and commissions passed back to the plan provider or sales person. Some of these fees are fair – as long as they don’t bring the total amount of employee fees to over one percent. Avoid any fund with a commission or any strings attached.