What is one percent really costing you?
Not the fee. The wealth that never existed, because the money taken out each year was never there to compound. Set your plan and compare fee levels side by side.
Your plan
Assumed annual return before fees: 7%. Fee levels compared: 0.2%, 0.5%, 1%, 2%.
Wealth lost to the highest fee$158,225Against the same plan with no fee at all, over 25 years. Of that, $75,411 is growth the deducted money never earned, because it was taken out before it could compound.
Assumes a constant return and contributions paid at the end of each month. Your own outcome depends on the order of returns, which no plan can choose.
Show the figures
| Fee | Final value | Wealth lost | Share lost |
|---|---|---|---|
| None | $527,207 | $0 | 0% |
| 0.2% | $508,408 | $18,799 | 3.6% |
| 0.5% | $481,577 | $45,630 | 8.7% |
| 1% | $440,267 | $86,940 | 16.5% |
| 2% | $368,982 | $158,225 | 30.0% |