These little fees can make or break your 401k

When it comes to choosing the best retirement account, the devil is in the details. Tom Zgainer, CEO and founder of the financial service company America’s Best 401k, says that hidden retirement fees can potentially end up shaving 10 years off your retirement savings.

So what exactly are these fees?

“Total investment-related fees of 1.5 percent or 2 percent or 2.5 percent are only because other parties are getting paid,” Zgainer said.

In other words, the majority of these fees are operational expenses, for example, paying the powers that be for handling your account. Here are two hidden fees you should be on the lookout for

RELATED: Check out 2018's best and worst U.S. states for retirement: 

Best and worst states for retirement 2018
See Gallery
Best and worst states for retirement 2018
1. Florida – You knew it had to be high on the list, didn't you? In terms of affordability, Florida topped the list while it placed fifth in terms of quality of life, overcoming its 20th-ranked healthcare rating.

2. Colorado – Ranked second in healthcare while quality of life came in 8th place, Colorado is constrained by its 23rd-place ranking in affordability.

3. South Dakota – The home of Mount Rushmore is the second most affordable state and ranked sixth when it came to healthcare, but can't break the top half in quality of life (ranked 32nd).
4. Iowa – Not typically thought of as a retirement destination, Iowa has decent rankings across the board (9th in healthcare, 11th in quality of life and 26th in affordability).

5. Virginia – Quality of life ranks well in Virginia (9th) while affordability and healthcare rankings are above average (18th and 21st respectively).

The next five desirable retirement states after Virginia are, in order, Wyoming, New Hampshire, Idaho, Utah, and Arizona.

What about the five states with the worst rankings? In descending order, they are:

46. Arkansas – Dead last in quality of life and 45th in healthcare, Arkansas is pulled up by its 20th-place showing in affordability.

47. Mississippi – The same principle applies to Mississippi, but even more so. The state is 49thin quality of life and last in healthcare, but it ranks 10th in affordability.
48. Rhode Island – Healthcare is above average (22nd), but quality of life and affordability are poor at 46th and 48th place, respectively.
49. New Jersey – The least affordable state in the union also has below average rankings in quality of life (28th) and healthcare (33rd).
50. Kentucky – Kentucky ranks 47th in both quality of life and healthcare and only 38th in affordability, earning the Bluegrass State WalletHub's least desirable retirement state ranking for 2018.

12b-1 Fees

This fee is annual marketing or distribution expenses on a mutual fund — aka commissions.

See: How to Master Your 401k in Your 50s

Sub-Transfer Agent Fees

This is a fee that record-keepers or third-party administrators charge for holding an omnibus account at a mutual fund company.

Also, beware of administrative service and asset charges as well as maintenance fees. When all is said and done, you could potentially miss out on hundreds of thousands of dollars due to such fees, according to Zgainer. If you want to avoid these fees, talk with your provider to get started.

“We’re all susceptible to these fees,” Zgainer said. “It’s a matter of bringing it up to those who can effect some change.”

Click through to read about certain bank fees you should never pay.

More from GO Banking Rates: 
Your 401k Could Make You a Millionaire — Here’s How One Man Did It 
11 Things You Should Never Do With Your 401k 
Do These 13 Things to Boost Your Retirement Savings Now

This article originally appeared on These Little Fees Can Make or Break Your 401k

Read Full Story