I have a couple of retirement plans with former employers that have some money still in them. I heard that leaving them in these plans is expensive, because they charge higher fees when you leave. How do I find out what the fees being charged are, so I can see if it’s better to roll them over into my own account?

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Posted by Lindsay VanSomeren (MONEY FORUMS: 3, Answers: 4)
Asked on March 19, 2016 9:12 am
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Hi Lindsay, great question! There are a couple of pieces to this.

First, there are several ways to get the fee information. Your annual statement is supposed to contain fee information; this has been required by the Department of Labor’s Employee Benefits Security Administration since 2012. If you do not have your annual statements you can get the fee information from your former employers or in some cases from the investment company’s website.

In general, the fee relationship is dependent on the size of the 401(k), and therefore on the size of the employer. Smaller plans distribute fixed costs across fewer participants. Hence they have higher costs. Conversely, large plans can distribute costs across more participants and will also have lower cost options available due to their size.

Aside from fees it can be a nuisance to have multiple accounts to manage. Additionally, many 401(k) plans are fairly limited in their investment options. Fees are only one consideration, the bottom line is really what you get to keep after fees and expenses. Having the funds in fewer places with readily available information could make them easier to manage.

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Posted by Peter Neeves (MONEY FORUMS: 1, Answers: 59)
Answered: March 20, 2016 11:10 am