Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Practice Management > Compensation and Fees

5 Ways to Avoid Hidden 401(k) Fees (Time Moneyland)

Your article was successfully shared with the contacts you provided.

The average person pays about $250 a year in 401(k) fees, according to Investment Company Institute, which would cost a dual-income household $20,000 over 40 years. A survey by the Transamerica Center for Retirement Studies found that 71% of employees were not aware that 401(k)s even had fees. There are a few suggestions workers can use to avoid hidden 401(k) fees. Some of the 401(k) fees come from managing the fund, but the costs on index funds are a fraction of 401(k) costs. IRAs can be an alternative investment vehicle, unless the 401(k) offers matching contributions. Insurance-based products like variable annuities may charge 401(k) participants 2% annually. Borrowing from 401(k)s can result in service fees. Employers can look into a plan’s fee and try to get better options.