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The Retirement Savings Drain – The Hidden & Excessive Costs of 401(K)s

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The Retirement Savings Drain – The Hidden & Excessive Costs of 401(K)s – by Robert Hiltonsmith, May 29, 2012

  • “Though your retirement or bank accounts statements contain no evidence of it, everyone who has an IRA, 401k, or any other individual retirement savings account pays a variety of fees every year. But because these fees are taken “off the top” of investment returns or share prices account holders generally have no idea how much all of this is costing them. These fees can be substantial: over a lifetime, fees can cost a median-income two-earner family nearly $155,000 and consume nearly one-third of their investment returns. Worse, these fees are often excessive and financial services companies can get away with charging higher-than-necessary fees for a number of reasons, namely: the savers’ lack of information, the inefficiency of financial markets and individualized investing, and the substantial costs—both in money and time—associated with switching between investment brokers.”
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