PHILADELPHIA - Millions of Americans put money into a 401(k) plan, hoping it will one day lead to a comfortable retirement.
But Consumer Reports has a warning about hidden fees.
401(k) savings plans can actually cost you a lot of money. Consumer Reports reveals the fees that eat into your retirement, and what you can do about it.
Courtney Harwood and her husband have been putting money into 401(k)s for 18 years. They hope to retire by age 70.
"My husband and I have 2 kids and we both work, and we save as much as we can but we do worry that it's not going to be enough," she said.
Saving enough money isn't the only concern. Fees can chip away at your retirement, often costing tens of thousands of dollars.
A typical two-income couple will pay more than $150 thousand dollars in fees over the course of their lives.
"That's a whole lot of money coming out of your nest egg you could otherwise have later on," said Tobie Stanger, Money Editor at Consumer Reports.
Consumer Reports says look for plan offerings with lower fees.
A good option - "Target Date Funds" for your 401(k) - which relocate over time based on your expected retirement date. We found fees as low as .08 percent, or just 80 cents for every $1,000 dollars you've invested.
And it pays to start planning early.
If you're making $50 thousand dollars a year at the age of 45 - and you want the same lifestyle in retirement - you should have saved 90 thousand dollars.
"It may seem daunting but if you up your contributions often along with your raises every year, it can really add up," said Stanger.
At the very least, save enough to take full advantage of your company's 401(k) match.
Many investors aren't taking high fees lying down. The Supreme Court found in favor of 401(k) investors in just one case we looked at - employees of Edison International.
To read the full report from Consumer Reports, CLICK HERE.