By Brett Arends
Many small-business owners and their employees are getting hosed on their retirement plans, thanks to costs that are starkly higher than larger companies, and now we have proof.
Fund-research company Morningstar has found that the average fees in small company plans are twice those in big companies. Just the higher fees alone mean that someone working at a small company would on average end up with 9% less in retirement savings after 35 years as someone at a big company, even if they saved exactly the same amounts and invested the money exactly the same.
(That’s how much higher fees hurt you over time.)
But what really stands out is that the range of costs charged by some small company plans is huge.
Some of them run at very low costs: So we know it’s possible. But many others are being charged simply extortionate fees by their 401(k) providers or consultants,…