401k Expense Ratios
401k plans are offered at many mid-to-large-sized companies, but many of the people who contribute to them don’t realize that these retirement savings plans aren’t free. Depending on the funds you select, you could be stuck with high expense ratios that will slowly chip away at your hard-earned retirement savings. And these expense ratios might not be explicitly expressed to you.
Your expense ratio might be somewhere between 0.5 percent and 2 percent, which doesn’t seem like much. But just as compound interest accumulates over time, so does a 2 percent expense ratio that’s working against you. So, when picking funds for your 401k, try to choose those with low expense ratios.