Retirement Investing Mistakes You Should Avoid ASAP

High fees in retirement plans, investments

From the expenses charged by mutual funds to record-keeping costs, fees add up. That translates to fewer dollars available for compounding and a lot less money at retirement.

Plan fees can run as high as 4 percent, but “an acceptable level is around 1.5 percent for everything,” says Craig Morningstar, chief operating officer at Dynamic Wealth Advisors. That includes the mutual fund fee known as the expense ratio.

If plan fees are unreasonably high, participants should ask if the plan is working with a professional plan fiduciary. Professional fiduciaries, whose duty is to act in the best interests of their clients, can save a plan enough money to more than make up for their expense.

Workers can most easily control mutual fund costs by making smart investment choices. Since high fees can negate any outperformance above benchmarks, low-cost index funds are generally a smart option. Many employers incorporate index options in the target-date funds they offer.