Savers beware: Fees may be shrinking your 401(k)

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Associated Press

Posted on April 12, 2014 at 2:03 PM

Updated Sunday, Apr 13 at 9:00 AM

WASHINGTON (AP) — It's the silent enemy in our retirement accounts: High fees.

And now a new study finds that the typical 401(k) fees — adding up to a modest-sounding 1 percent a year — would erase $70,000 from an average worker's account over a four-decade career compared with lower-cost options. To compensate for the higher fees, someone would have to work an extra three years.

The study comes from the Center for American Progress, a liberal think tank. Its analysis, backed by industry and government data, suggests that U.S. workers, already struggling to save enough for retirement, are being further held back by fund costs.

"The corrosive effect of high fees in many of these retirement accounts forces many Americans to work years longer than necessary or than planned," the report said.

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120-a-11-(Jennifer Erickson, Director of Competitiveness and Economic Growth, Center for American Progress, in AP interview)-"a million dollars"-Jennifer Erickson of the Center for American Progress says for the typical household, even small differences in fees can add up to a lot over a lifetime. (12 Apr 2014)

<<CUT *120 (04/12/14)££ 00:11 "a million dollars"

121-a-14-(Jennifer Erickson, Director of Competitiveness and Economic Growth, Center for American Progress, in AP interview)-"fees your paying"-Jennifer Erickson of the Center for American Progress says it can be frustrating trying to figure out the fees charged in a retirement account. (12 Apr 2014)

<<CUT *121 (04/12/14)££ 00:14 "fees your paying"

122-a-14-(Jennifer Erickson, Director of Competitiveness and Economic Growth, Center for American Progress, in AP interview)-"ability to retire"-Jennifer Erickson of the Center for American Progress says companies are expected to provide all kinds of standardized information from energy ratings for appliances to calorie counts on sodas, but not retirement accounts. (12 Apr 2014)

<<CUT *122 (04/12/14)££ 00:14 "ability to retire"

123-a-09-(Jennifer Erickson, Director of Competitiveness and Economic Growth, Center for American Progress, in AP interview)-"funds you pick"-Jennifer Erickson of the Center for American Progress says people should make an effort to figure out what kind of fees they're paying for their retirement accounts. (12 Apr 2014)

<<CUT *123 (04/12/14)££ 00:09 "funds you pick"

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