Employees that invest in their company’s 401(k) plan should be able to understand their statements. A new rule from the Labor Department will, for the first time, enable many investors to understand how much of their investment dollars are going up in fees. “I know it’s there and that there’s money involved for me, but other than that I really don’t know how to access how much I have etc.,” says Lupe Zuniga of Waco, Texas. Each person that has money in a 401(k) should have received a statement by August 30 detailing how much money they have invested in which funds and how much they pay for that privilege.
WHERE DID MY MONEY GO? Quick: what do you pay in fees every year for the 401(k) plan from your employer? If you’re like most Americans, you have no idea. The new AARP survey found that 71% of people invested in their company’s 401(k) plan didn’t realize that they were paying any fees. If you’re wondering how much you’re paying in fees, you’re not alone. Elena Hayes of San Diego says, “Truthfully I glance at it every now and again but I often wish I could have someone tell me how I can use it to its fullest potential.”In 2006 the Government Accountability Office (GAO) published a report stating that employers were hard pressed to know whether they were offering the best funds to employees, employees had no way to understand what they were being charged, and both employers and employees were probably being charged too much.