Average American Will Pay $369,000 in Banking and Investing Fees, Study Finds
Financial advisors who want to make sure their clients are on track to save for retirement may want to talk to them about the fees they pay for banking and investment accounts. The average American will pay a whopping $369,000 in such fees over their lifetime — which, if invested and yielded 6% returns, would be worth $1.1 million over a lifetime, according to a recent analysis by NerdWallet.
Checking and savings account fees only add up to an average of $13,941 and $3,720 respectively over the course of a lifetime, according to the report.
But 401(k) fees add up to an average of $206,753, NerdWallet found, with the two most common fees being mutual fund expense ratios and administrative fees.
Individual retirement account fees will add up to $144,633 over a lifetime, which NerdWallet calculated using median trade commissions, mutual fund expense ratios and transaction fees as well as mutual fund sales loads from the top online brokers.
Most of those fees, NerdWallet writes, could be avoided by choosing the right provider, while expense ratios could be reduced with low-cost funds.
Meanwhile, 53% of Americans say they don’t know what they’ll pay in banking and investment account fees over their lifetime, according to a Harris poll of 2,000 U.S. adults conducted in June, NerdWallet writes.
The other 47% believe they’ll pay an average of just $2,244 over their lifetime, according to the poll. Furthermore, 15% of survey respondents think they’ll pay less than $500 — and one in 10 don’t think they’ll pay anything at all.