Hidden Fees In Your 401(k)

The 401(k) gave us the opportunity to participate in the stock market. To own a piece of American capitalism. And we could save on our taxes by making tax-deductible contributions from our paychecks.

How many times have you elected to invest in some mutual funds inside your 401(k)?

Did you ever look at the actual cost of the funds or did you take for granted that the broker was putting you in the lowest cost funds available?

401(k) plans receive the benefits of tax deferral, but most are loaded with up to 17 different fees and costs between the underlying investments and the plan administration.

Communication Expenses

• Enrollment (materials)
• Ongoing (materials)
• Enrollment (meetings)

Investment advice Record-Keeping and Administrative Expenses

• Base fee
• Per participant fee
• Per-eligible employee fee
• Distributions
• Loans origination
• Loans maintenance
• Semiannual discrimination testing
• 5500 filing package 
• Other expenses 

 Investment Expenses

• Base fee
• Individual (mutual) fund expenses
• Manager/advisor fee
• Other asset fees (revenue sharing, wrap, and administration) 

Trustee Expenses

• Base fee
• Per-participant fee
• Asset charge 

Most people that I come in contact with amazingly think there are no fees. Just think about this:

• If you can reduce your fees, that money that goes back into your account. 
• Who do you think is responsible for making sure that your 401(k) has the lowest fees available to you? 

Are you ready for the shocking truth - it's not the adviser but the employer. That's right, your employer is the one who is responsible for making sure that you don't pay too much in fees.

How often do you think they are evaluating this? 

According to the Daily News, in 2013 seventy-five percent of the 401(k)s audited by the US Department of Labor last year resulted in plan sponsors being fined, penalized or forced to make reimbursements for the plan errors. And those fines and penalties weren't cheap. In fact, the average fine last year was $600,000 per plan.

Do you think your HR department knew about these regulations and if you're a small business owner this fine could put you out of business quickly.

Here is how you can check your current fee's and compare what your paying. Go to http://americasbest401k.com/401k-fee-checker and get your report.  Then take that report to your HR department or owner.

You can also give us a call and we will provide you with a free consultation and help you determine what you're actually paying in fees.

Get a handle on your 401(k) in 2015 and put more money into your pocket.