Your Family is Probably Losing $155K from 401(k) plan, and why new rules won’t help

A two-income American family with an average income that dutifully invests in a 401(k) plan using typical strategies will lose $155,000 – or about 30 percent of what they should have saved for retirement — to Wall Street fees, according to a study by an economic justice advocacy organization.

The Demos study, released last month, is just the latest in a long string of research showing 401(k) plans are a better deal for Wall Street than for you. Many show that people lose about one-third of their retirement money to fees that they don’t even know they’re paying. The actual lifetime impact of fees is a matter of widespread debate, but it shouldn’t be. In one dramatic example, John Bogle, the inventor of index funds, demonstrated how fees can consume 80 percent of an investor’s money through something he’d dubbed “the tyranny of compounding fees.” (Click on the link to see his proof.)

source – by NBCNews RedTape Chronicles, January 2013

Published January 17, 2013

Topics: Connecting the Dots | Financial Clarity

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