The Hidden Fees Eating Your 401(k)

Many workers happily contribute to their 401(k) without ever checking the expense ratios on the funds inside it, and over a forty-year career that oversight can quietly cost six figures. A fund with a one percent annual expense ratio rather than a 0.05 percent index fund will eat roughly a third of the lifetime gains on a typical contribution schedule.

Log into your plan and look for the lowest-cost broad index options, usually labeled total stock market, S&P 500, total international, and total bond. Compare expense ratios across all available choices and shift to the cheapest equivalent funds.

If your plan offers a brokerage window, you may be able to access institutional Vanguard or Fidelity funds at near-zero cost. Always contribute at least enough to capture the full employer match because that is an instant guaranteed return that no market strategy can beat. When you change jobs, roll the old 401(k) into an IRA or your new employer plan so you can keep tabs on it and choose better funds if the old plan was expensive.