(EMAILWIRE.COM, August 07, 2013 ) Las Vegas, Nevada -- National statistics show that Americans are overwhelmingly unprepared for retirement as they do not have enough money in their retirement savings accounts. For this reason, a report by SelfDirectedRothIRA.org about the high costs of investment fees is particularly alarming. According to the report, Americans are losing large amounts of their Roth IRA retirement savings to investment fees.
Roth IRA retirement savings are kept in investments, such as mutual funds, stocks, and bonds. These investments must be kept by a custodian, such as a bank or a brokerage firm. The custodian will charge fees for maintaining the retirement account and the investments within it. As SelfDirectedRothIRA.org points out, the custodial fees at first glance seem to be very small. However, as retirement savings grow, the fees can quickly add up and cost investors a large amount of their savings.
Custodians will often charge a one-time fee per transaction and then an ongoing yearly fee. The yearly fee is given as an expense ratio and is typically a percentage of the value of the portfolio. Self Direct Roth IRA gives an example of just how much money investors are losing by having a 1.5% instead of a 0.5% expense ratio. With a yearly deposit of $5,000 at an annual growth rate of 7%, the 30-year value of the portfolio with a 1.5% expense ratio would be just $362,177. Under the same circumstances but with a 0.5% expense ratio, the portfolio would be worth $431,874 a difference of over $69 thousand.
"Unfortunately, it is very difficult for investors to calculate just how much these investment fees are costing them," says an adviser from Self Directed Roth IRA. "The fees get removed directly from the portfolio instead of arriving as a bill. Plus, most people have various investments in their portfolios and each can carry a different expense ratio. Then there are all the other investment fees, such as financial adviser fees and yearly custodial fees."
To reduce investment costs, Self Directed Roth IRA recommends taking steps such as seeking out investments with low expense ratios, consolidating investments, avoiding investments with performance charges, and closing inactive investments.
About Self Directed Roth IRA
Self Directed Roth IRA is an organization which provides free advice on how to use a Roth IRA for retirement and financial planning.
Diana Laurence
702-800-3262
media@selfdirectrothira.com
Source: EmailWire.Com![]()
Roth IRA retirement savings are kept in investments, such as mutual funds, stocks, and bonds. These investments must be kept by a custodian, such as a bank or a brokerage firm. The custodian will charge fees for maintaining the retirement account and the investments within it. As SelfDirectedRothIRA.org points out, the custodial fees at first glance seem to be very small. However, as retirement savings grow, the fees can quickly add up and cost investors a large amount of their savings.
Custodians will often charge a one-time fee per transaction and then an ongoing yearly fee. The yearly fee is given as an expense ratio and is typically a percentage of the value of the portfolio. Self Direct Roth IRA gives an example of just how much money investors are losing by having a 1.5% instead of a 0.5% expense ratio. With a yearly deposit of $5,000 at an annual growth rate of 7%, the 30-year value of the portfolio with a 1.5% expense ratio would be just $362,177. Under the same circumstances but with a 0.5% expense ratio, the portfolio would be worth $431,874 a difference of over $69 thousand.
"Unfortunately, it is very difficult for investors to calculate just how much these investment fees are costing them," says an adviser from Self Directed Roth IRA. "The fees get removed directly from the portfolio instead of arriving as a bill. Plus, most people have various investments in their portfolios and each can carry a different expense ratio. Then there are all the other investment fees, such as financial adviser fees and yearly custodial fees."
To reduce investment costs, Self Directed Roth IRA recommends taking steps such as seeking out investments with low expense ratios, consolidating investments, avoiding investments with performance charges, and closing inactive investments.
About Self Directed Roth IRA
Self Directed Roth IRA is an organization which provides free advice on how to use a Roth IRA for retirement and financial planning.
Diana Laurence
702-800-3262
media@selfdirectrothira.com
Source: EmailWire.Com