If you invest through your employer sponsored retirement plan, you may be surprised to see how much you're actually paying for it. FeeX, a service that tracks the fees in 401k plans for over 10 million Americans, finds that the disparity between plans is significant.
The differences are striking: For very large plans, those with more than 100,000 participants, the average expense ratio among funds was just 0.27 percent. But for very small plans with fewer than 100 participants, the average expense ratio for the funds offered was more than three times as high at 0.87 percent.
Even funds in slightly larger plans, with 100 to 1,000 participants, had an average expense ratio of 0.70 percent. While anything below 1 percent is considered relatively low, that's a big difference between plans.
Having worked with this industry for many years, we suspect the FeeX calculations are still "low ball" for a variety of reasons. For example, once you factor in all the transaction costs that you subsidize for other investors (which basically line the pockets of Wall Street) the actual expenses are quite a bit higher. We at Blue Harbinger pride ourselves on fighting back by avoiding unnecessary fees, costs and expenses that most people don't even realize they're paying.