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Taking a Look at 401(k) Fees

Looking at 401(k) Fees
Photo Credit Alan Levine


Recently I went on a quest to find a new gym. After some research, I found a place I thought was a good match. The winning gym was close to my home, relatively new and, most importantly, they offered a monthly membership for just $14.95.

The next day, I merrily drove to the gym and sat with account associate to sign up and hit the gym. But reading the fine print, I was shocked to see how various fees moved my monthly fee from $14.95 to an average of nearly $30 a month.


Fees can sneak up on you and change the bottom line of many of your purchases (don’t even get me started with airlines). They can also affect the bottom line of your 401(k). A recent AARP study revealed seven in ten Americans are not aware they pay 401(k) fees. To better understand 401(k) fees and how they’re affecting your 401(k), here’s a snapshot of some fees associated with 401(k) plans:

  1. Plan Administrator Fees - These expenses cover the everyday costs of a 401(k) plan including record keeping, accounting and legal costs. The costs associated with educational software and electronic access to your plan can also be bundled under this heading.
  2. Individual Service Fees - Some plans have additional fees for special features and options. These are usually applied to the specific participants who elect a special feature – not to all plan holders. An example would be a fee associated with a 401(k) loan.
  3. Investment Fees - These cover the highest percent of your 401(k) fees and are generally assessed as a percentage of assets invested. They’re usually investment- and management-related expenses stemming from trades, loads, redemption costs, account maintenance and transfer charges.

This isn’t a complete breakdown of your 401(k) fees, but it’s a first step to understanding 401(k) fees and how they could alter your account.

Under current requirements, it can be difficult to figure out what fees you’re paying. New Department of Labor regulations coming into effect next year – watch Smart401k CEO Scott Holsopple discuss changes coming to your 401(k) in 2012 – will force your 401(k) plan administrator to disclose more information and be more transparent about fees.

Until then, if you want to know more about the fees associated with your specific retirement plan, contact your plan administrator. They should be able to provide you with an account statement along with your plan’s summary description and annual report.

As with any aspect of retirement saving and planning, knowledge is key. If you have any questions regarding your 401(k), contact our advising team at or 877-627-8401.

Evan Davis

Marketing Associate

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About Smart401k

Smart401k is a web-based investment adviser providing unbiased advice to help employees invest in their employer-sponsored retirement plans.  Smart401k provides service to almost 11,000 clients who collectively have more than $1.5 billion in assets. Individuals receive personalized investment recommendations based on the funds in their plan and support of professional investment advisers available to answer all investment questions. Based in Overland Park, KS, Smart401k can be found at