Saved myself 10's of thousands of dollars today!

[rennigade]

Ok...not in a split second...but over the lifetime of my retirement accounts.

I use fidelity for my 401k/Rollover IRA accounts. They were both target retirement accounts...which is fine...problem is the expense ratio was not. One was .6% and the other was .75%. This year it cost me around $650 per fund...so $1300 total.

I made a switch to mutual funds that track the s&p 500...both funds have an expense ratio of .05%. If I would have had these funds since the beginning of the year it would have only cost me around $85...vs the $1300 I coughed up. I could have had $1200 more in my pocket essentially.

As my retirement accounts grow over the 20+ years I will be contributing...this could have added up to a LOT of money being thrown away for no good reason.

The only kicker is in about 5 years I will have to go back in and re balance slightly...add some bonds to the mix...which will take very little time.

I just wanted to share this and let people know how costly ER can be.

This also goes to show how expensive a financial adviser can be over the life of your investment accounts. Even if they only charge 1%...yikes!

[rennigade]

Ive said before I want to retire at 52 years old. Chart below covers each year up until retirement at year 20...but also goes 7 years past...the time at which I would start pulling from account.

This chart starts with beginning balance of $200k, which is what I actually have in my 401k. Adding $10,000/year to be conservative if I can no longer max. Also assuming a 5% return on the market (again fairly realistic.)

When I hit 52 years old I would have paid around $66,000 in expenses on my previous fund. At age 52 I would no longer be contributing but allowing account to grow for another 7 years until age 59...the total expenses I would pay from now until age 59 would be approx $100,000. Thats some serious cabbage.

I also put a column on the amount of expenses I will pay on my new funds with low expenses. A $92,000 difference by age 59.

[feh]

As my retirement accounts grow over the 20+ years I will be contributing...this could have added up to a LOT of money being thrown away for no good reason.

Yup. Expenses make a huge difference over time. The ER for our portfolio is .15%.

FSITX and FSTVX are our 2 largest holdings. Piece of cake to rebalance/reallocate when needed.

[rennigade]

Yup. Expenses make a huge difference over time. The ER for our portfolio is .15%.

FSITX and FSTVX are our 2 largest holdings. Piece of cake to rebalance/reallocate when needed.

I too moved over to FSTVX. Will add FSITX in a couple years.

[FLA]

I could not believe the change in expenses when I switched from Fidelity managed funds to Vanguard index funds. Fidelity's index funds were not that much more but the "free" Fidelity planner did everything but stand on her head to keep me from changing to index funds so I took my ball and went home.