The average annual fee charged by most funds is 1%, according to the Center for American Progress. 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. Investment fees are generally between 0.03% and 2% of
plan assets.
At the lower end of the range are low-cost, passively managed index funds from companies like Vanguard, which track market performance and require little to no supervision. In the high-end sector, you’ve actively managed funds that try (and usually fail) to outperform the market over time after deducting fees. How much you pay depends on the balance in your plan and how your account is divided between those funds. The administrative fees are then split between the individual accounts in proportion to their account balance or as a flat fee to each participant’s account
.
