Under a 401(k) plan, your benefit is your vested account balance. This account balance reflects the contributions you make to the plan, the contributions your employer makes to the plan on your behalf (if any), and investment gains and losses.
Many 401(k) plan participants are responsible for choosing how to invest their account balances. If you direct the investment of your 401(k) plan account balance, it is important to understand that fees and expenses may substantially reduce the growth of your 401(k) plan account balance over the course of your working life. The Department of Labor (DOL) estimates that paying 1% in extraneous fees can reduce your 401(k) plan account balance by 28% over the course of 35 years.
Accordingly, it is important to familiarize yourself with the various types of fees and expenses that can affect the growth of your 401(k) plan account balance. This fact sheet summarizes many of these common fees.
Part of the UMass Boston Community-Engaged Teaching, Research, and Service Series. http://scholarworks.umb.edu/engage
Becker, Anne and Arnold, Jeffrey, "401(k) Plan Expenses" (2015). Pension Action Center Publications. 16.