Hidden Brokerage Costs

Most people with a 401(k) plan assume their plans have no costs and the reason they think that is pretty much understandable: employers retain a certain amount from their paychecks, deposit it directly into 401(k) accounts and then leave it to work. The only thing that’s left out of the equation is that a 401(k), similar to mutual funds outside of a 401(k), have expense ratios which have to be deducted from the returns of the funds. It’s not something out of the ordinary but it is something that’s disregarded by many 401(k) participants.