Management Matters: is
a New Article series dealing with the issues that
arise when managing personnel and how to optimize your
current staff in a company.
Managing your Retirement
July 1st, 2011
If you are like many Americans today, your once stable nest egg has cracked and crumbled, falling off the wall like the rest of the economy during the recession. Although these unfortunate circumstances had a great impact on people’s retirement and savings funds, it is important to realize that there are things you can do now to save what you have left or recreate what you have lost in the past years. For example, managing your own various retirement and savings accounts can save you a lot of money in the end.
Like The Wall Street Journal states in their article about costs that can ruin a retirement savings, “What you don’t know can cost you, and sometimes cost dearly. Advisers say that there’s a host of unknown costs and fees lurking inside your 401(k) plans, IRAs and other such retirement accounts. And often, those fees can make a world of difference in your overall investment returns.”
Because many Americans are unaware of what is going on with their money and their accounts, it is entirely possible that many are losing a large chunk over time to small fees here and there. There are both large and small fees often associated with accounts like these. For instance, a small fee that many people rarely notice tacked onto their statement like when people move their IRA accounts, adds up. As The Wall Street Journal reported, “…These clients were whacked with two unexpected fees one was the so-called account transfer fee and another was the annual maintenance fee.” This happens a lot because banks and brokerage firms do not like having their assets leave or transfer out.
The annual maintenance fee for a retirement fund is what most owners are familiar with and this tends to be one of the only fees that they look out for or expect to have. According to Denise Appleby, CEO and founder of RetirementDictionary.com, the 10 fees “that can eat away at your retirement savings are: account termination fees, account maintenance fees, various account transfer fees, Roth conversion fee, federal fund wire fee and overnight delivery fee, “special investment” fee, “special investment” set-up fee, form 990-T filing fee, loan processing fees, and the recordkeeping fee.” The majority of people do not have any idea that so many fees like these exist.
Although there are so many fees involved, it is possible to lower these scattered costs. Advisers point out the fact that although people cannot make these fees disappear, they can find tax efficient ways to pay them. Learning the ins and outs of these costs and how to ease some of the rates is important in saving for the future. The worst-case scenario is finding yourself unprepared when it comes to knowing where your money is really going. The fees listed above are only 10 costs that can ruin your savings accounts. There are many other charges and hidden fees out there and it is imperative to know what exactly you are committing yourself to, especially when you are young and setting up different retirement and savings accounts. Many say that what a person does not know will not hurt them. This is definitely not the case when it comes to managing your money intelligently.