Why you might be overpaying for investing

When it comes to investing, there's one thing you can control: Fees. And yet, expenses are often overlooked by investors. That's a big mistake. Consider Money Rule No. 64: "If you can't figure out what an investment or financial adviser is costing you, you're overpaying." I'm Jean Chatzky, and this is Money Rules.

According to a piece of research from Rebalance IRA, an investment management firm, 46 percent of baby boomers believe they are paying nothing in investment fees. In reality, the average employee retirement account expense is 1.5 percent per year.

Expenses can have a huge impact on your investment returns. The difference between low and high fees can total hundreds of thousands of dollars over the course of a long time horizon. If you're not clear on where you stand, it's time to pull your head out of the sand.

If you have a financial adviser, make sure you're clear on how and what he is paid -- and ask him to explain your investment expenses to you, as well. If you don't work with an adviser, you can find expense information on your account statements and an outline of most fees in your retirement plan summary document or account agreement. This is fine print worth reading.


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