A Look at 401(k) Plan Fees: An Introduction
More and more employees are investing in their futures through 401(k) plans. Employees who participate in 401(k) plans assume responsibility for their retirement income by contributing part of their salary and, in many instances, by directing their own investments.
If you are among those who direct your investments, you will need to consider the investment objectives, the risk and return characteristics, and the performance over time of each investment option offered by your plan in order to make sound investment decisions. Fees and expenses are one of the factors that will affect your investment returns and will impact your retirement income. As an educated consumer, you should
- Learn common questions about the fees and expenses that may be paid by your 401(k) plan
- Make informed investment decisions
- Consider fees as one of several factors in your decision making
- Compare all services received with the total cost
- Realize that cheaper is not necessarily better
Keep in mind, however, that this information is a simplified explanation of some common 401(k) fees. It is not a legal interpretation of the nation's major retirement benefits protection law, the Employee Retirement Income Security Act (ERISA), or other laws, nor is this information intended to be investment advice.
U.S. Department of Labor. (n.d.). A look at 401(k) plan fees. Retrieved October 19, 2016, from http://www.usa.gov/