When was the last time you looked at your 401(k) plan's fees?

For many of us, the answer to that question is, most likely, never. And for the moment, it's not easy to get your hands on these numbers -- although that's going to change. This past October, the U.S. Department of Labor ruled that all employer-sponsored 401(k) plans will have to disclose fees on investments and transactions. But these new regulations won't go into effect until Jan. 1, 2012. So, for nearly another year, you could be paying too much -- and high fees add up fast.

Ryan Alfred, co-founder and president of 401(k) rating company BrightScope, believes "roughly 50% of all participants, and particularly those in smaller plans, could save money by moving to low-cost options within an IRA." If your 401(k) fees are too high, some companies will allow "in-service withdrawals," an option to move money into an IRA while you're still employed by the plan sponsor. Other companies won't (to see which side of the aisle your company is on, check your summary plan description). And if you get a new job, you can roll your old plan's assets into an IRA or into your new 401(k), if it's less expensive.

Here's what else you need to know:

Do some research.

It's fairly easy to find out what you're paying for the investments in your plan. You can plug the ticker symbols of mutual funds into a site like Morningstar.com, and it will spit back expense ratios. It's harder, however, to get access to other, noninvestment expenses that your plan charges to cover administrative costs -- things like accounting, legal fees and record-keeping.

You can generally request this information, but an even easier and perhaps more informative way to gain it might be to plug your details into the Personal 401(k) Fee Report tool on BrightScope. The calculator will generate an overview of the fees you're paying and tell you if they're higher or lower than average. It will also show the impact on your retirement savings, which can be huge.

Let's say your plan charges 0.40% in fees. BrightScope says the average fee for a low-cost 401(k) investor is 0.32%, so you're about 0.08% off. That may not seem like much, but in the example I ran, with an employee putting away $12,000 per year, that small difference could cost you over $40,000 by the time you retire, depending on the investments you've chosen.

Understand what "high" means.

Finding out your plan's fees is one thing, but how do you know if they're fair? The BrightScope calculator will give you a good indicator, but if you'd prefer to go at it alone, Alfred gave me a few rules of thumb. First of all, make sure you're comparing apples to apples: A plan with a billion dollars in assets will charge less than a plan with a million dollars in assets, simply because it has more negotiating power.

Alfred says a low-cost plan that holds a million dollars in assets might charge 75 basis points, while a low-cost plan with a billion dollars in assets might charge 25. On the high side, a plan with a million dollars in assets could cost well above 3% in fees. Billion-dollar plans charging over 1% would be considered high.

Take action.
The biggest expense in most plans comes from the investments themselves, so you always want to check those costs, "An index fund should charge less than 50 basis points," says Alfred, "and an actively managed fund should be less than 1% of assets." Fortunately, these costs are also the ones you have the most control over.

On the trickier side are those administrative fees charged by the plan itself. If you find these are too high and you can't roll them to an IRA, try talking to your benefits administrator or your HR department. Ask how they're making sure those fees are reasonable, and ask if they've benchmarked them to see how they stack up against other plans.

Also ask how the fees are allocated, suggests Alfred. "For the most part, fees are allocated based on assets," he says. "If you have a large account balance, you'll pay more in fees. Let's say there is a fee for educating investors, and you don't use those resources -- you might be paying to educate other people."

On the other hand, if the plan doesn't base these fees on assets, and they're instead charged per capita, smaller account holders will get wacked: "Let's say everyone pays for record-keeping, and it costs $150 a head," says Alfred. "For a small accountholder who has $1,000, that's 15% of their account balance. That may not be fair."

It's a gray area, but you at least want to know how the fees are distributed in your plan.

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hardw99

FEES -- YOU SAY FEES -- Could come a day when Government needs the money for all their debt and just confiscate the 401K

January 19 2011 at 12:38 PM Report abuse rate up rate down Reply
g974

Ok, the Tea Party thinks they have Social Security elimination in their sights. Put people in a position where they have no "social safety net" (Reagan's term), and you will see a political tsunami. My guess is that these people will try to give the rest of the country to the giant corporations and the public will react. Remember that those "2nd Amendment" rights that you radcons hold so dear apply to the rest of the population, too.

January 17 2011 at 11:08 PM Report abuse -1 rate up rate down Reply
ronsjigslures123

Every month i still buy silver and pladdium, and some gold coins and place them in the box, yes i pay more now than way before but all metals will go up and stay up and i will still make money of my buys at even todays prices. Silver is being used in all new stuff these days and is in demand, one oz. will sell for 50 to 80 bucks a oz. in the comming couple years, so everything i have will make even more money. Why let you money SIT in a 401k plan doing NOTHING up making you a small profit, or any at all for all those years, when you can buy metals and watch thm over that same period of time INCREASE 2 fold or increase to as much as 200% higher on your money over that same period of time your TRYING to make money in that 401k plan for retirement. You want that so called 3/4 million bucks at retirement like those 401k plan promissed, then buy coins and sit on thm you will get your 3/4 million at retirement.

January 17 2011 at 9:34 PM Report abuse +1 rate up rate down Reply
1 reply to ronsjigslures123's comment
bill52055

you would be better off putting your money into non perishable food , when the food crisis hits, you can sell a can of beans for an once of gold, your food will be worth more than gold, because you can't eat gold.

January 18 2011 at 12:24 AM Report abuse rate up rate down Reply
ronsjigslures123

So far since i started saving silver one oz. coins instead of a 401k plan, my investment in those safty deposit boxes have been going UP approx. 24% a year, and metals market has not even hit its high yet. When it does, that will change from then to 50% a year on my investment, all the profit i make is MY MONEY with no one taking all kinds of fees out for all sorts of crap to make them money on my savings. When i retire ill cash in certain amouts of the coins and will have all of my retirement money PROFITS in my hand. Its as easy as that. I want 30 grand for a new truck just go to the bank box, take out enough coins to at going selling price sell them and buy the truck, and same goes it with a second house in warm weather and so on. Be your own bank.

January 17 2011 at 9:23 PM Report abuse +1 rate up rate down Reply
ronsjigslures123

The metals market is a pure savings and a profit with out fees savings plan, if you buy and HOLD silver or gold. My friends can say like a big shot well i own a 401k plan, well guess what when they retire they will get so much a month, and there investment will be worth 1/2 of what it should. My stock pile and bank boxed coins will be worth 1/2 to 3/4 more than i paid and i will get ALL MY INVESTMENT at retirement time, the whole 1/2 million bucks to do what ever i want. Stop paying all these banks and crooks behide these 401k,s read the 401k book there are fees taken out for certain trades, to fees in giving your own money to you at retirement. Be your own bank, screw the rest of them, because all they want to do is make money off your hard earned savings.

January 17 2011 at 9:12 PM Report abuse +1 rate up rate down Reply
ronsjigslures123

This is why people that have small 401k,s should cash them out some how and take the money and buy silver and gold with it. I cashed mine in some years ago, and bought gold and silver coins and placed them in a secure safty deposit box, the silver coins COST ME zero to buy in FEE,s, and i purchased them for around 15 bucks each, the same silver coins are worth 30 bucks tday that is 1/2 of my investment in a RETURN and NO one is taking any money OUT of my retirement coin fund NOT EVEN A DIME, except a small safty deposit box fee. AS the price of metals ALWAYS goes up and it will, and has been for years, all those coins will be sold when i retire for approx. WORTH 1/2 to 3/4 or even 3 times the cost of what i paid for each one,and here,s the good part being your OWN bank when i sell all those coins for silver I DON

January 17 2011 at 9:05 PM Report abuse rate up rate down Reply
oaheron

Years ago when they started the 401K's I got into the system. After a few years I started looking into the fees they were charging only to find out they were taking up to 50% of the money in fees that I was putting in. I closed the account and payed the the penilty. Put the money in real estate and made a bundle. Then one day a rep from the 401k account showed up at work and had a meeting to try and get the other/new employees into 401 K. I started out by asking him about the fees they were charging and how much they we taking out. The guy stood up gathered his paper work and left. He knew I had him up a creek to begin with.

January 17 2011 at 5:02 PM Report abuse +3 rate up rate down Reply
cartra

FEE'S HAVE VERY LITTLE TO DO WITH IT. IT'S OUR OVER TAX AND OVER SPEND GOVERNMENT. ALSO, CROOKED AND GREEDY CORPORATE AND BANKING EXEC'S.

January 17 2011 at 2:12 PM Report abuse +9 rate up rate down Reply
1 reply to cartra's comment
Jeanie

You forgot to add in the politician and there greed and corruptician

January 18 2011 at 6:00 AM Report abuse rate up rate down Reply
gardeningatnite

In the days of my youth, I was told what it means to be a man;
Now I've reached that age, I've tried to do all those things the best I can
No matter how I try, I find my way into the same old jam....Good Times, Bad Times, you know I've had my share, Corporations will make their money by hook or crook...but I still don't seem to care!........

January 17 2011 at 12:34 PM Report abuse +2 rate up rate down Reply
PAULA

toosmart4u, your still at it I can not believe it, are you not taking your med's again, you need help bud.

January 17 2011 at 12:07 PM Report abuse -4 rate up rate down Reply