Despite new requirements for transparency, many retirement account holders do not know what they are paying in fees on their accounts, says a new survey by Rebalance IRA, a retirement investment advisory firm in Palo Alto, Calif.
Forty-six percent of those surveyed believe they do not pay any fees at all and 19 percent believe they pay less than 0.5 percent. Only 4 percent believe they pay more than 2 percent in fees. The survey included 1,165 full-time employed Americans age 50 to 68.
In fact, Rebalance says, the average fee for a retirement account is 1.5 percent and smaller plans have even higher fees.
“These fees are not trivial. Over time, these seemingly small fees will compound and can easily consume one-third of investment returns, yet a lot of people don’t believe that this problem applies to them,” says Mitch Tuchman, managing director of Rebalance IRA.
Other findings of the survey showed that 28 percent of full-time employed baby boomers are not actively saving for retirement. Sixty-six percent of the respondents say they are very or somewhat anxious about their readiness to retire, and an almost equal number (67 percent) saythey would save more if they could go back in time and make changes.