What are you paying for your “free” IRA?
Originally published on: September 23, 2015
Do you know how much you’re paying for your IRA? Apparently, even the wealthy and financially savvy have trouble with this simple question.
You’ve probably seen TV commercials for one of the big firms in which a father is talking with son or daughter about his financial advisor, while they stroll through Manhattan or jog down an idyllic woodland path. At some point the kid looks rather critically at Dad and asks, “how much are you paying him?” And Dad has no clue.
Whatever his personal money manager is overcharging, the guy looks like he can afford it. The rest of us are smarter. We have our IRAs in online brokerage accounts, leveraging technology to get the most from every dollar we invest. Right?
Not so fast! If you have an IRA, even a “no fee” IRA, you may be paying hefty fees without even knowing it.
Fees, fees, and more fees
The big culprit is management fees built into the mutual funds and other investments in your account. These can be well over 1%. If that doesn’t sound like a lot, consider that if you’re making a 6% return on average, that’s a 16.66% slice of your savings growth! Over time these fees can cost you many thousands of dollars. There are often lower fees on the account itself. If you pay for advice or a high level of service, that usually comes with fees as well. There’s even a kind of “distribution fee” called a 12b-1 that’s usually hidden, often substantial, and perfectly legal.
If you’ve ever actually read the pages of fine print that come with your statement, you know it can pretty difficult to tell what’s going on. Judging from some of the industry’s dirty laundry, that’s no accident. Fortunately, now there’s an easy way to see what you’re paying in fees: GuidedChoice’s new IRA Fee Checker.
See how your IRA compares, for free
Just give us the info about the account you’ve got and the funds you’re holding in it. (Don’t worry, we don’t store any personal information.) We’ll show you your grand total as a percentage of your account value. Then we’ll show you how much you’d pay with our own Guided IRA – which comes with professional advice and management built in. You may be surprised – and even find that you can save money and get the advantages of best-practice investment advice.
So if you’re not sure whether you’re That Guy, now it’s easy to find out. If you have an IRA, this would be a good time to start asking some questions. Before your kids do.