How to figure out how much you're paying in 401(k) fees and potentially save yourself thousands

pulse

May 3, 2017 4:51 PM

It's not simple to figure out the fees in your company retirement plan, but there are tools out there to help.

Your 401(k) can be confusing, but there are tools to help you make sense of it all.

For many American workers, high fees are devouring large portions of their retirements savings.

Yet half the US admits it doesn't know how much it's paying in fees for a 401(k) plan, the most common retirement vehicle available to employees, according to a 2013 study by research firm LIMRA. Twenty-two percent of people

"This is probably the biggest thing that's affecting people's portfolios over a long period of time," Michael Solari, a certified financial planner with Solari Financial Management, told Business Insider."A lot of people don't really understand what the impact of maybe a half a percent is on their retirement."

Solari routinely pushes his clients to seek out their 401(k) fees and take proactive measures to lower them.

The first step is figuring out just how much you're paying in fees — but that isn't always simple or straightforward.

There are a variety of fees you need to keep your eye on, but here are the three main categories, according to US Department of Labor's 401(k) guide:

recordkeeping, accounting, legal and trustee services."

If you suspect your company is overpaying for its 401(k) plan, Solari recommends meeting with your plan administrator — who's legally required to diligently manage the company in a reasonable manner — and lobbying for changes. That may seem intimidating, but Solari says you "don't need a crowd." Even just one person "

You don't have to be an investment expert to start the conversation. You can bolster your case with the aid of a simple and free online tool that Solari recommends: BrightScope.

This website specializes in tracking and rating thousands of 401(k) plans, providing a 0 to 100 score on each. It also lets you compare your company's plan with others in its peer group, which should give you a good idea if your company is lagging.

Armed with a little knowledge, you can perform a tune-up on your retirement plan today — and potentially save your future self thousands.

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