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A Look At 401(k) Plan Fees

More and more employees are investing in their futures through 401(k) plans. Employees who participate in 401(k) plans assume responsibility for their retirement income by contributing part of their salary and, in many instances, by directing their own investments.

If you are among those who direct your investments, you will need to consider the investment objectives, the risk and return characteristics, and the performance over time of each investment option offered by your plan in order to make sound investment decisions.

Fees and expenses are one of the factors that will affect your investment returns and will impact your retirement income.  The information contained in this booklet answers some common questions about the fees and expenses that may be paid by your 401(k) plan. It highlights the most common fees and encourages you, as a 401(k) plan participant, to:

• Make informed investment decisions

• Consider fees as one of several factors in your decision making

• Compare all services received with the total cost

• Realize that cheaper is not necessarily better

Keep in mind, however, that this booklet is a simplified explanation of 401(k) fees. It is not a legal interpretation of the nation�s major pension protection law, the Employee Retirement Income Security Act (ERISA), or other laws, nor is this information intended to be investment advice.

Study of 401(k) Plan Fees and Expenses.

In Conclusion...

When you consider the fees in your 401(k) plan and their impact on your retirement income, remember that all services have costs. If your employer has selected a bundled program of services and investments, compare all services received with the total cost.

Remember, too, that higher investment management fees do not necessarily mean better performance. Nor is cheaper necessarily better. Compare the net returns relative to the risks among available investment options.

And, finally, don�t consider fees in a vacuum. They are only one part of the bigger picture including investment risk and returns and the extent and quality of services provided.

Source: Department of Labor

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