Your retirement account statement likely does not tell you this, but fees are adding up on your IRA or 401(k) over time – and they can be substantial, as much $155,000 for a median income, two-earner family over a lifetime.
That was not a misprint. In many areas, that amount will buy you a nice home.
The research and advocacy group, Demos, outlines the cost of retirement funds in a new report.
“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,” Demos found in its report: The Retirement Savings Drain: Hidden & Excessive Costs of 401(k)s.
The report’s most striking find: a two-earner household, where each partner earns the median income for their gender each year over their working lifetime, will pay an average of $154,794 in 401(k) fees and lost returns.
A higher income dual-earner household, where each partner earns an income greater than three-quarters of Americans each year, can expect to pay as much as $277,969.
In the long term, the average mutual fund earns a 7 percent return, before fees, matching the average return of the overall stock market.
