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Cost of a 401(k) Plan | By: Chad Halbur

Do you know what your 401(k) plan is costing you as the employer? What it is costing you as a participant?

The average cost to offer a company sponsored 401(k) plan is between 2.0 to 3.0% of the value of plan assets!  Many business owners are under the impression that they are not paying any costs for the company retirement plan, but that is simply not true.   Despite the many investment platforms available, there are a limited number of ways the fees can be charged.  Fees can be paid by the employer, paid by the participants, or a combination of the two where the fees are shared between the employer and participants.  A generous employer that picks up these costs does not want the cost to be a drag on the profitability of the corporation.  If participants are paying the costs, you do not want it to be a drag on the investment performance of their (your) retirement savings. The goal is to keep costs as low as possible without sacrificing the integrity of the plan.

 

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