There’s a new calculator available that is specifically designed to demonstrate the damaging impact of high 401(k) fees.
401(k) recordkeeping and Third-Party Administration (TPA) services provider Employee Fiduciary, LLC, announced today the launch of the new calculator that shows retirement savers how much they can increase their savings in retirement by lowering their 401(k) fees today.
“Few savers appreciate the cumulative effect of 401(k) fees in our experience. When a 401(k) account pays fees, the saver won’t just miss their principal in retirement. They’ll also miss the compound interest the payments would have earned had their amount remained invested instead,” said Employee Fiduciary President and CEO Eric Droblyen. “Our calculator demonstrates the significance of these losses. We think this information will motivate savers to lower their amount today.”
The calculator, available now at www.employeefiduciary.com/401k-fee-future-value-calculator, offers users a view of how fees can impact their retirement. Features of the calculator include:
- A user-friendly interface where individuals can adjust and customize their current age, retirement age, current account balance, annual contributions, and rate of return.
- A dynamic bar chart that displays projected balances at four different annual fee rates: 0.00%, 0.25%, 0.50%, and 1.00%.
- A breakdown showing the potential retirement balance for each fee scenario, with color coordination to match the bar chart for ease of understanding.
“To make retirement as affordable as possible, workers must keep their 401(k) fees to a minimum throughout their working years,” Droblyen added. He sees this calculator as a tool to help savers understand how much cost matters when saving for retirement.
Earlier this year, Employee Fiduciary formally submitted a comment letter to the U.S. Department of Labor (DOL) in response to the department’s Request for Information concerning the SECURE 2.0 Reporting and Disclosure requirements.
In the letter, Droblyen addressed several key areas of concern, with a primary focus on the need for enhanced clarity and transparency in how 401(k) fees are presented to participants. This new calculator fits directly into Employee Fiduciary’s goal of empowering 401(k) participants to understand the cumulative effect of fees and to advocate for lower fees.
Mobile, Ala.-based Employee Fiduciary serves over 5,000 small businesses and approximately 145,000 participants nationwide.
SEE ALSO:
• Employee Fiduciary Looks to DOL for 401(k) Fee Transparency
• 401(k) Plan Fees Declining, But Small Plans Still Pay More
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
