how much does fidelity charge to manage 401k

Daniel Parker

3 min read

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26-01-2025

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Meta Description: Unlock the truth about Fidelity 401(k) fees! This comprehensive guide breaks down Fidelity's pricing structure, including plan fees, investment expenses, and transaction costs. Learn how to minimize your expenses and maximize your retirement savings with Fidelity. Discover different fee structures and what they mean for your retirement plan. We'll also compare Fidelity's fees to industry averages to help you make an informed decision.

Understanding Fidelity's 401(k) Fee Structure

Fidelity offers a range of 401(k) plans, and the fees associated with each plan vary considerably. There isn't one single answer to "How much does Fidelity charge?". The cost depends on several factors, including:

• The type of plan: Fidelity offers different types of 401(k) plans, each with its own fee structure. These include traditional 401(k) plans, Roth 401(k) plans, and rollover 401(k) plans.
• Your employer's contributions: Some employers fully or partially cover the administrative fees for their 401(k) plan. Other employers may pass some or all of these costs on to their employees.
• The investment options chosen: The expense ratio of the individual mutual funds or ETFs you select within your 401(k) will impact your overall cost. These are separate from plan administration fees.
• Plan features: Additional features, like recordkeeping services, financial advice, and educational resources, may incur extra fees.

Key Fee Components

There are typically three main categories of fees associated with a Fidelity 401(k):

1. Plan Fees: These are administrative fees charged to cover the costs of managing the 401(k) plan itself. This can include recordkeeping, administration, and customer service. Plan fees can be a flat fee per participant, a percentage of assets under management (AUM), or a combination of both.

2. Investment Fees (Expense Ratios): These are the fees charged by the individual mutual funds or exchange-traded funds (ETFs) you invest in within your 401(k) plan. They are expressed as a percentage of your assets and are deducted daily. Lower expense ratios mean lower costs over time. Always check the fund's prospectus for details.

3. Transaction Fees: These are fees charged for specific transactions, such as buying or selling investments, or making certain changes to your account. Fidelity generally minimizes these fees for 401(k) accounts, often waiving them for online trades of certain investments. However, it's crucial to check your plan documents for specifics.

How to Find Your Fidelity 401(k) Fees

The easiest way to determine your specific Fidelity 401(k) fees is to:

1. Log in to your Fidelity 401(k) account online.
2. Navigate to the "Fees" or "Pricing" section. This is typically found under the account summary or settings menu.
3. Review your plan documents. Your plan’s fee schedule should be clearly outlined in the official documents provided by your employer.

You should also request a summary of your investment's annual fees from Fidelity. This would encompass your expense ratios and any other relevant fees directly related to the funds you have selected.

Comparing Fidelity 401(k) Fees to Industry Averages

Determining whether Fidelity's fees are competitive requires comparing them to industry averages. While precise averages fluctuate, independent research often reveals that Fidelity generally falls within the average range for plan fees, particularly for larger plans. However, the expense ratios of the individual funds within your plan are more critical to your overall cost than the plan administration fees. Look for low-cost index funds to minimize these expenses.

Minimizing Your Fidelity 401(k) Fees

Here are some strategies to keep your costs down:

• Choose low-cost investment options: Select mutual funds or ETFs with low expense ratios. Index funds typically have lower expense ratios than actively managed funds.
• Negotiate with your employer: If your employer covers some or all of the plan fees, negotiating a better deal could reduce your out-of-pocket costs.
• Maximize employer matching contributions: Employer matching is essentially free money; take full advantage of it.
• Understand your fees: Regularly review your fee statements to ensure you're comfortable with the costs associated with your plan.

Conclusion: Navigating Fidelity 401(k) Fees

While Fidelity offers competitive pricing, the precise cost of managing your 401(k) depends on various factors. Understanding the fee structure, comparing costs, and making informed investment choices are crucial for maximizing your retirement savings. Regularly checking your statements and selecting low-cost investment options will ensure you retain the majority of your investment gains. Remember to contact Fidelity directly with specific questions about your plan fees.