Best-selling author and life coach Tony Robbins says that hidden fees in retirement plans are confusing and a major problem for retirement savers. Unfortunately, the move toward increased disclosure has not solved this problem, he believes.
"For 30 years the industry did not even have to tell investors what they were charging," said Robbins, who is also a partner and board member of America's Best 401k and chief of investor psychology for Creative Planning. "A few years ago the law changed, and now you get a 35- to 50-page disclosure document that — if you're a lawyer or you have a degree in finance — maybe you can understand."
Of course, the more you pay in fees, the less money you have for retirement, Robbins said. But sadly, he pointed out, 92 percent of Americans don't know the costs involved with their 401(k) plan — and 72 percent believe they're not paying anything. Obviously, nothing could be further from the truth.
Robbins noted that even small differences in a fee percentage can have a major impact on someone's nest egg. Cutting fees by just 1 percent, he explained, can make your money last 10 additional years in retirement.
According to Robbins, hidden fees and various backdoor payments are costing Americans billions of dollars a year and can reduce an investor's overall retirement savings by as much as 40 percent to 60 percent. He is urging people to take control of their finances to make sure they are aware of the fees associated with their qualified retirement plans and better manage their 401(k) plan.