Are your 401(k) fees too high?
Fees can take a noticeable share of a 401(k) over many years. Your statement and plan documents show what you pay, so you can compare.
| Option | Upside | Downside |
|---|---|---|
| Leave it in the old plan | ✓ Nothing to move now | ✗ You cannot add new money. Old plan fees may still apply. |
| Move it to a new employer plan | ✓ One account to manage | ✗ Only if the new plan accepts transfers. Fees differ. |
| Roll it to an IRA | ✓ Often a wider range of investments | ✗ IRA fees vary by provider. Plan loans do not carry over. |
| Cash it out | ✓ Money is available now | ✗ Taxed as income. 20% withheld. A 10% extra tax applies before 59½ unless an exception applies. |
Source: https://www.finra.org/investors/learn-to-invest/types-investments/retirement/401k-investing/401k-rollovers and https://www.finra.org/rules-guidance/notices/13-45 and https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distributions and https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions
Find the fee lines
Look for asset-based fees, administration fees and fund expenses. Your statement shows the amounts you actually paid.
Model the long-term effect
A small fee difference compounds over decades. Model a balance, a fee and a timeline before you decide.
Ask each provider for fees in writing
Each option has its own fee schedule. Request each one in writing before you choose.
Review fees each year
Plans can change their fee schedules. Check fees once a year rather than only at the start.
Compare plan and IRA fee schedules
Plan fee schedules and IRA fee schedules may use different structures. Line them up before you choose.
Common questions
Are 401(k) fees the same across plans?
No. Plans and providers set their own fees, so compare each account's costs before you move money.
Where do I find my plan's fee details?
The summary plan description lists plan rules and fees. Your account statement shows the fees you paid.
Are fees the only cost to compare?
No. Taxes, withholding and withdrawal rules also matter. Compare the full cost of each option, not only the fee rate.
Want the dollar effect first? Run your numbers in the free calculator to see how fees add up in dollars.
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