via Wall Street Journal
Like many investors, the kind of retirement you have may largely depend on how much money you stuff into your 401(k) plan and how well the funds in it perform.
If that’s the case, though, you may want to take a closer look at what those investments are costing you.
The fees associated with 401(k) plans—one of the primary benefits employers offer their employees—can vary widely, and many investors don’t understand just how damaging those expenses can be. Higher fees erode an investor’s returns, putting a dent in a nest egg that gets bigger over time—sometimes significantly so. That means less money when you decide to leave the workforce for good.
Employees of small businesses are particularly vulnerable. While smaller 401(k) plans typically cost more to run, partly because they don’t have economies of scale, a recent report from 401(k) researcher BrightScope expressed “shock” at just how much more expensive smaller plans can be.