401(k) Fees

If you have a 401(k) retirement plan, you're probably experiencing growing anxiety as you watch the value of your returns decrease. But did you know that even in good times, you're still losing? That's because the average 401(k) plan participant pays 2.5 to 3.5 percent in fees and other hidden charges! While nobody can accurately forecast the rise and fall of stock pricing, you can control the costs in your plan.

Your account balance determines the amount of retirement income you will receive from your 401(k) plan. Contributions to your account and the earnings on your investments will increase your retirement income. On the flip side, fees and expenses paid by your plan – or, in actuality, paid by you – may substantially reduce the growth in your account as well as income for your retirement.

For example, let’s assume that your 401(k) plan has $5,000,000 in assets. Every year, $250,000 in deposits are made to the plan through employee deferrals and/or company matching contributions. Over the next ten years, if your returns on investments average 8%:

• If you pay 2.93% in fees and expenses, the plan account balance would be approximately $11,513,000.
• However, if fees and expenses average .93%, your account balance would be approximately $13,610,000.

That’s a glaring reduction of $2,097,000 (or 15.41%) to your plan’s account!

Recently, class-action lawsuits have been filed against several companies, claiming that employers have allowed excessive 401(k) fees to be charged to their plans. The lawsuits claim that the companies have failed to seek the best possible price for the services provided.
In many cases, the lawsuits allege the companies simply did not understand the fee structure. Unfortunately, plan fees are almost always next to impossible to uncover. Yet, the costs are there, found deep within many different pages of the stacks of paperwork you received on your 401(k) plan.

Federal law requires that the plan fiduciary work to protect the employees' interests. How can you make sure your plan has low fees? The answer is the Stonegate 401(k). Through a series of recent initiatives, we have developed a high quality, low cost, no “hidden fees” 401 (k) product. Funds are invested through our long-standing relationship with respected industry leader Charles Schwab. The Stonegate 401(k) will not only help you control plan costs, but it will also help you manage your fiduciary liability. 

Stonegate would like to assist you in uncovering your “hidden fees” and get you on track to maximize your retirement savings.  If you haven’t performed your due diligence on your 401 (k) plan recently, do yourself a favor and give us a call for a free plan analysis today.