Hidden 401(k) or 403(b) Expenses

Daniel Penzing
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Fees, Fees, and More Fees

The age old question: what are the hidden fees you have to pay when getting into a 401(k)?

As you should know already, a 401(k) is an employee benefit plan that allows you to save for the future. This is done by having your employer deduct money from your paycheck and place it into a retirement fund. The general idea behind this is to save up for the future.

As you should know, you get taxed on money you receive now and then again when you go to take out retirement money.

So, from taxes to investment earnings, let’s take a look at some of the fees you might not know you’ll be getting yourself into.

Surcharge for Electronic Statements- It’s Coming

If your employer offers electronic statements instead of paper ones, you’ll be subject to a surcharge.

In the past, the IRS was asking a replacement surcharge of up to $.86 for each paper statement. But in 2016, this regulation was dropped. So, now there are no IRS regulations regarding the amount that an employer can charge.

But employers are still getting around it by charging a flat fee for the electronic statements. And the number one place that employees will see this fee is on their 401(k) statement.

Other Issues With 401(k)s and 403(b)s

Although supplemental retirement plans such as the 401(k) and 403(b) can be a very good way to build your retirement funds, there are several issues to consider. First, fees … and high fees at that … can eat into your retirement savings.

In fact, a recent study found that many workers are paying between 25 percent and 121 percent in hidden fees for their 401ks! Another issue is that these accounts can be extraordinarily complex. These are issues that a good financial advisor is well-equipped to deal with.