Q: Is Someone Taking Money From Your 401k Without Your Knowledge?
A: 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 401k financial advisor or 401k service provider or recordkeeper is taking a percentage of your 401k 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 401k fees extracted from our 401k 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 401k professionals are taking millions of dollars out of workers’ 401k retirement savings, year after year, in the form of 401k 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 401k fees an indefensible.