Are 401(k) Fees Skimming Your Money?
Answer: Probably, according to non-profit AARP, the answer is “YES”.
We think 401(k) financial advisors who are deducting fees from participants 401(k) retirement savings are essentially “pick-pockets.” Why do we say this? A pick-pocket is someone who takes money from you when you are unaware it is happening. So if according to non-profit AARP, a 401(k) financial advisor or 401(k) service provider or recordkeeper is taking a percentage of your 401(k) retirement savings, that’s pick-pocketing. Would you agree?
Even if the money being taken without your knowledge is a very small percentage of your retirement savings, it does great harm. A low 1% per year in hidden 401(k) fees extracted from our 401(k) without your knowledge will end up costing you up to a 40% loss in potential earnings over 30 years. That’s $150,000, from your pocket to theirs. We know thousands of 401(k) professionals are taking millions of dollars out of workers’ 401(k) retirement savings, year after year, in the form of 401(k) fees. The people taking fees and weakening workers’ future retirement security should be called out for it, prominently disclose it, and try to justify it. But they will not, or cannot not, because 401(k) fees an indefensible.