There have been different estimates for what the fees are.
The fees are subtracted right out of the savings in your account, and there is no requirement to notify you about them: when you get your quarterly 401(k) statement in the mail, you will find no line-item expense labeled “fees.” The bulk of these fees are for investment services. In chapter 13 of Mark Lund’s book, The Effective Investor, he talks more about this topic.
If you want to learn more about how fees might be affecting your 401(k) watch the above video on YouTube.com from Bloomberg TV.
Fees can determine whether your nest egg looks like an ostrich’s or a sparrow’s. Here are two examples.
First example: Over a 20- or 30-year period, these fees can really affect the compounding of your assets. The Department of Labor offers an example: if you have $25,000 right now in your 401(k) and just let it sit there, and your investment returns average 7% across the next 35 years with 0.5% annual fees, you will end up with $227,000 in 2042. But if those annual fees are set at 1.5%, you will end up with only $163,000 in 2042. A 1% difference in fees and expenses would leave you with 28% less money for retirement. Wow. Please note that the 7% return used in this example is for illustrative purposes only and is not indicative of any particular investment; your results will vary.