401k Fees: What One Extra Percentage Point Costs Over 35 Years
Do you know what your 401k costs you every year?
You might be thinking, "Ralph, I check my balance every quarter." Good. The balance is not the cost.
Nobody sends you a bill for 401k fees. They come out of your investments before you ever see the number. Research summarized by CBS News found about four in ten workers don't know they pay them at all.
One Percentage Point Is Bigger Than It Sounds
The Labor Department has a simple example. Start with $25,000. Leave it 35 years at a 7% return.
At 0.5% in fees, you end up with $227,000. At 1.5%, you end up with $163,000.
Same money. Same market. 28% less.
The policy group Demos estimates a median-income, two-earner family pays nearly $155,000 in 401k fees over a lifetime.
The Fund You Never Picked
Maybe HR put you in a target date fund. Nothing wrong with that. Plenty of people use them on purpose.
But two funds with the same target year can charge very different fees. On $100,000, 0.08% is $80 a year. 0.68% is $680.
Same label. Different bill.
Old Accounts Count Too
An estimated 31.9 million 401ks have been left behind at old employers. They hold $2.13 trillion, about $66,691 each.
If you've changed jobs, ask the old plan whether you now pay fees the company used to cover. Then try the Labor Department's Lost and Found database. It's free, and you'll need a Login.gov account with ID verification.
The 10-Minute Check
I'm not giving investment advice here. I'm telling you where to look.
1. Find your funds
Log into your 401k and write down the name of every fund you hold.
2. Find the fee
Look up the expense ratio for each one and write it next to the name.
3. Ask about the plan
Ask HR or the plan website whether there are administrative fees on top.
Start With the Numbers, Not the Shame
Nobody taught you this.
You can't fix a number you haven't seen.
Find the fund. Find the fee. Write both down.
Come Ask Me Live
Join us LIVE at becomingfinanciallyconfident.com/live
Got a 401k question? Leave a voicemail and we'll answer it on the show.
Licensed Public Accountant
Ralph V. Estep, Jr. is a Delaware-based Licensed Public Accountant (LPA), author, rancher, and media host with more than 30 years of experience in finance, taxation, and small-business leadership. As the founder of Saggio Accounting+PLUS and the creator of the Ask Ralph Media network, Ralph helps entrepreneurs, creators, and everyday families replace money confusion with clarity, confidence, and practical next steps — without shame and without hype.
Ralph's work blends deep professional expertise with a coach's mindset and a communicator's heart. He has held leadership roles across public accounting, financial institutions, law firms, and technology organizations, bringing a rare combination of traditional accounting rigor and modern systems thinking to the people he serves. A graduate of the University of Delaware and Wilmington University (MBA), he is known for turning complex money topics into simple, repeatable frameworks that help people make wiser decisions and build lasting financial stability.
He is the host of Becoming Financially Confident, a live weekday show built on a single conviction: most money stress is not a character problem but a systems problem, and shame is what keeps people from fixing it. The show grew out of Financially Confident Christian, which Ralph hosted for more than 1,200 episodes across eight seasons and earned national recognition. The new show offers the same host and the same feed, opened up to a wider audience.
Through Ask Ralph Media, Ralph hosts several other programs. Grit and Growth Business… Read More
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