What are the fees for a 401(k) account?
In the Video above, Scott Farnsworth, Central Florida's Tax-Free Retirement Expert answers a frequently asked question: What are the fees for a 401(k) account?
"Most people are surprised to learn that they pay rather hefty fees inside their 401(k) account. That's because these fees are seldom reported, and the financial services world has done a good job hiding the ball.
401(k) fees come in two varieties. There are administrative fees for the organization that administers the plan. They keep the records. They send the reports. They make sure the plan is in compliance. Those fees average about one and a half percent per year. There are, also, fees for the company that administers the investments inside the plan. 401(k) funds typically pay two to four percent charges to the investment authority. What we see is that on average 401(k) plans cost each participant between two and four percent per year. That's a hefty charge.
By comparison, the TRA, or the tax free retirement account, actually charges about one percent over the life of the account. That's a significant saving for someone who wants to retire on their terms."