- Investment fees can take years off of your retirement savings without you ever realizing it. Focusing on cutting fees can save you tens of thousands of dollars, if not more.
- Most mutual funds and ETFs with high fees can be easily replaced by lower-cost funds with a similar makeup.
- Running your investments through Personal Capital‘s free retirement fee analyzer and updating your investments can pay dividends for decades to come.
- Learn more about Personal Capital »
They say that a penny saved is a penny earned. Nowhere is that more true than your investment accounts.
While a 1% annual fee might not sound like much, over years of saving and investing for retirement and other big goals, fees can eat away at tens or even hundreds of thousands of dollars. That’s way too much to give away without even realizing it.
When I first signed up for Personal Capital in October 2012, I was taken aback by the total fees I was paying across all of my mutual funds and ETFs. Based on what I found in my Personal Capital account, I made updates that saved me about $300 per year, which compounds to over $50,000 over 30 years, assuming a 10% return.
If you want to take a closer look at your own fees, and potentially save some serious cash, here’s how to do it.
Create a Personal Capital account
While most brokerages offer some way to review your account holdings and sort by fee, the best way I’ve found to do it is with Personal Capital‘s free retirement fee analyzer. Personal Capital offers both a free, online finance software and a paid investment management service. You can use the free software without signing up for an investment account, which does charge a fee.
Personal Capital will aggregate all of your financial account data onto a single, convenient dashboard. This helps you monitor many aspects of your money, from your monthly cash flow to your portfolio’s asset allocation. And you don’t have to pay a dime to use any of these tools.
Note that while anyone can use Personal Capital‘s tools for free, its investment services — it offers a combination of algorithmic management as a robo-adviser and human advisers for more personalized management — charge a fee of 0.49% to 0.89% depending on your account balance, with a minimum balance of $100,000.
Connect your investment accounts
Once you get your account set up, you’ll need to connect all of your investment accounts. To get the most from Personal Capital, you’ll also want to connect any bank, credit card, and loan accounts as well.
Once connected, Personal Capital can view your investments and recent transactions. Based on your current mix of stocks, bonds, funds, and other investments, Personal Capital will crank out useful reports to help you understand where you are today and what you need to do to reach your retirement goals.
Head to the Retirement Fee Analyzer
Under the planning tab in the app, click on "Retirement Fee Analyzer." Once you are done, make sure to spend a little time in all of the tools to learn more about your money. But for now, we are going to stay focused on the fees.
At the top of the screen, you’ll see your annual average fees compared to Personal Capital‘s benchmark of 0.50%. I think you can do much better, however. An all-index fund ETF portfolio could cost less than 0.10%. I just miss that benchmark myself over my five accounts.
The first time I logged in, my annual fees were much higher on a percentage basis. I had a much lower total balance across my retirement accounts when I went through this exercise myself in 2012. With my current plan in Personal Capital, I’ll pay $3,209 in fees over the next decade.
- How much money you need to retire at every age and comfortably live on investment income
- This is how much it costs to visit 10 of New York City’s most popular tourist attractions
- I ran my investments through Personal Capital’s free tool and was shocked by how much money I’d been wasting in fees