The fee and dollar amount that you will pay should be stated in your account documents. However, many of today’s banks, brokers, investment firms, and even investment funds no longer charge a fee. Some Roth IRA providers charge a monthly or annual account maintenance fee (sometimes referred to as a custody fee). The fee and the dollar amount you will pay should be stated in your account documents
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The biggest factors in the cost of your 401 (k) are the size of your company and the plan it uses, David Blanchett, head of retirement planning for Morningstar’s Investment Management Group, tells CNBC Make It. His research found that the average total fees range between 0.37% for the largest plans and 1.42% for the smallest plans. Most companies waive all account management fees if customers have a minimum amount of assets with the company. If you were working for a large company and the 401 (k) plan offers lots of investment options and cheap fees, it might make sense to keep it there, Blanchett says
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money included in IRAs is deferred for tax purposes, which means that all of your retirement savings goes towards building your nest egg and not into the IRS. The worst thing about these minimum balance fees is that you can only deposit a certain amount into an IRA each year. So it may not be your fault that your account size is too small. Numerous brokers, mutual funds, banks, and investment firms offer free IRA accounts without charging an annual IRA fee, and it’s not just deep discount brokers. The fundamental difference between a Roth IRA and a traditional IRA (sometimes referred to as a standard IRA or just an IRA) is that you may be able to deduct some of your contributions from a traditional IRA
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Even with financial companies that charge annual custody fees for their IRA accounts, there are usually ways to get the IRA account free of charge. Almost all credit unions offer free IRA accounts, although many have a minimum balance or opening deposit amount to get a free IRA. You just want to make sure that you get value for money from your investments without excessive fees reducing your returns. Customers whose IRA accounts are held directly with the mutual fund companies they invested with are slightly less likely to have things free of
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When you invest in investment funds, you pay your investment professional either in the form of a fee (advisor with commission only), an advisory fee (paid advisors), or a combination of both (paid advisors). However, unless you’ve already invested your assets with this broker or you still want to switch some funds there, look for a free IRA account instead
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