About 70% of people with 401k plans have no idea that they are paying a small fortune in hidden fees, a survey this year by AARP found.
That’s changing now, as new federal rules are requiring that plan providers—like Schwab, Fidelity, Vanguard, Putnam and others—reveal the fees they’re charging in a manner that ordinary folks can understand.
The rules don’t officially take effect until early next year, but many companies are disclosing fees in their statements now, so you can see what you’re paying.
Do these silly little fees matter?
Hugely. A study of 401k fees by the Government Accounting Office found that even a 1% fee can take a 17% bite out of your retirement stash, over 20 years.
Use this free tool at BrightScope to see if your 401k plan is charging fees that are unusually high.
Bottom line: By knowing what you’re paying, you can shop around for better investments.