Millions of Americans put money into a 401(k) plan hoping it will one day lead to a comfortable retirement. Barry Levy joins us with today’s Consumer Report and says that the fees in those savings plans can actually put a big dent in your retirement plans?
If your retirement plans include spending plenty of time on the beach…you better make sure you’re going to have the money to do it. There are fees on many plans that can wipe a large part your savings like a huge wave crashing on shore.
Courtney Harwood and her husband have been putting money into 401(k)s for 18 years. They hope to retire by age 70.
“My husband and I have 2 kids and we both work, and we save as much as we
can but we do worry that it’s not going to be enough,” Courtney Harwood, Has 401K.
Saving enough money isn’t the only concern. Fees can chip away at your retirement, often costing tens of thousands of dollars. A typical two-income couple will pay more than 150-thousand dollars in fees over the course of their lives.
“That’s a whole lot of money coming out of your nest egg you could otherwise have later on,” Tobie Stanger/Money Editor, Consumer Reports
Consumer Reports says look for plan offerings with lower fees. A good option – “Target Date Funds” for your 401(k) which relocate over time based on your expected retirement date. We found fees as low as point zero-eight percent, or just 80 cents for every one-thousand dollars you’ve invested…And it pays to start planning early.
If you’re making 50-thousand dollars a year at the age of 45 – and you want the same lifestyle in retirement – you should have saved 90 thousand dollars.
“It may seem daunting but if you up your contributions often along with your raises every year, it can really add up.”
At the very least, save enough to take full advantage of your company’s 401(k) match.
So, in addition to monitoring the cost of your phone plan, gas for your car and your cable bill…closely monitor the statements available to you for your retirement funds….so you can enjoy some fun in the sun on your favorite beach.