Why 401(k) fees matter
Most 401(k) fees top out around 2%, which likely doesn’t seem like much. But take a look at these fees in action — especially over the span of a decade or so — and you’ll quickly recognize why 401(k) fees matter.
Let’s say you put $50,000 into a 401(k) and let it sit for 10 years. Your account earns an average return of 8%, and you’re paying 2% in 401(k) fees. Over these 10 years, you’d sacrifice $13,509.19 of your account balance to account fees. Were your fees sitting at 1% instead of 2%, you’d only pay $4,694.01.