An eye-opening Report released last month by the Center for Retirement Research at Boston College reveals that the fees charged by mutual funds and 401(k) and IRA plans will slash the value of the typical person’s account by almost 37%!
That means if your account should have been worth $500,000, you end up with only $314,000 – all because of stealth fees that are draining your hard-earned savings! That’s $186,000(!) of your money that will end up in other people’s pockets, not yours.
These money-sucking fees often apply even to funds that track stock market indexes such as the S&P 500… as well as to the “Target Date” Funds that most employers now automatically put employees’ 401(k) money into.
Listen to John Bogle, the founder and former CEO of Vanguard, who many consider to be the father of the indexed mutual fund, quoted in MarketWatch, in February 2014:
Question: “If you pay a hefty fee to an active manager, what happens to your potential return?”
Answer: “Nothing good. At 2.5% over a typical investor’s lifetime, an astounding 80% of compounding returns ends up in the hands of the manager, not the investor.”
When our financial system – essentially our money managers, marketers of investment products and stockbrokers – put up zero percent of the capital and assume zero percent of the risk, yet receive fully 80% of the return, something has gone terribly wrong in our financial system.”
I’ve been doing some deep research into the fees charged by mutual funds and retirement accounts, and what I’ve discovered is mind-blowing.
For example, I looked at three popular S&P 500 Index funds and discovered that the worst of the three siphoned off 14.4% of your account value in 10 years, 26.6% in 20 years, and a staggering 37.2% in 30 years.
On a $100,000 Initial Account, that Adds Up to $160,712 in Lost Cash!
The least thieving of the funds only charged $11,512 in fees over 30 years. And other than the fees charged, these funds are identical! They’re all so-called “passively-managed” funds that simply track the S&P 500 Index. It’s not rocket science!
But pick the wrong fund – or let your employer pick it for you – and you’ll lose hundreds of thousands of dollars more than necessary!
In other words: Simply by avoiding these rip-off funds, you could end up with nearly $150,000 in extra cash to spend during retirement.
And remember: That’s with a $100,000 initial account.
A couple with $500,000 to start could end up with an additional…
…when they retire, simply by avoiding the hidden rip-off fees that Wall Street charges.
Think about that: An extra $750,000. That would give you MORE than double what you’d have otherwise.
For most retired couples, that much additional savings would mean never having to worry about money again right there.
In other words, just by making one small change in where you invest your nest egg – a change you could make in just 10 minutes – you could end up with more than twice as much money when you retire.
You could end up with a lifestyle substantially more prosperous than if you had not made that change.
Here’s a Heads Up About a Top-Secret Project I’ve Been Working On…
For the last year I’ve been working on a top-secret project. It could be the single most important thing I’ve ever done – and has the potential to completely transform your life.
I’ve been putting in some very long days, haven’t seen my husband much, and canceled my vacations. All my energy has gone into pulling together this special project!
It’s a distillation of more than ten years of research… and it’s all coming together next week. (One discovery I’ll share with you is something that will take you less than ten minutes to do, but can easily add six figures to your 401(k) or IRA – without taking on ANY additional risk.)
Grow your nest-egg safely and predictably every year – no matter what’s happening in the stock market.
The Bank On Yourself method is based on an asset that has grown in value every single year for more than 160 years. The value of your plan is guaranteed to grow by a larger dollar amount every year you have it. (So you can sleep like a baby when the next crash happens.) What other financial asset do you own that does that?
It’s easy to find out how big your nest-egg could grow – guaranteed – if you added Bank On Yourself to your financial plan. And there’s no cost or obligation to find out. Just request your FREE Analysis, if you haven’t already.