Monday, May 21, 2012

How Much Are You Paying?

If you have a 401(k) or another type of employer-sponsored retirement account, do you know how much you pay in expenses and fees, or how much your employees pay?

Starting this summer, the U.S. Department of Labor is requiring pension providers to lay out that information in a comparative chart for employers and employees. The rules, reportedly long fought by the financial industry, may bring a shock if you find that your administrative fees and fund management expenses are taking a big bite out of your retirement savings.

Yes, the information can probably be found in the fund prospectuses (prospecti?) for all the investments you own. But lots of people do not know that or do not take the time to dig it up. Yet it may mean a 40 percent difference in how much you have saved up when you retire.

Americans' confidence about their ability to retire comfortably is at a new low. So finding out how much you're paying - and getting a better deal if you're overpaying - is one step in the right direction. Look for your disclosure form no later than July 1 if you're a business owner; Aug. 30 if you're an employee.

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