What is the real cost of your 401(k) plan?

Sometimes third party plan administrators charge a variety of fees that make it difficult to access the true cost of your retirement plan. There are generally two different expenses, those paid by the business and those paid by the plan participant. Here is a general breakdown of our fees to give you an idea of what a plan with us should cost.

Cost to the Business

General plan administration costs are normally paid by the business and are fully tax deductable. Here is a general guideline of our administrative fees. Please request a proposal for complete details.

A business with ... would pay approximately ...
1 employee (self-employed) $250 per year.
2 to 10 employees $1,250 per year.
> 10 employees $995 per year plus $25 per participant (with a balance).

The above prices are general estimates that include all typical plan administration, compliance, and record-keeping tasks after the initial plan setup.

NOTE: Many firms charge a per participant fee based on the number of employees, not just those with a balance. This can significantly add to your costs. For example, for a plan with 50 employees, but with just 10 participating, that plan would incur approximately $1,250 of annual administration costs with us. A competitor plan that charges similar fees but counts all eligible employees would cost $1,250 base fee plus a fee for all 50 eligible employees ($1,250) or $2,500 per year. This is a significant increase and something you should be aware of.

Participant Costs

Participant costs are also something to take note of. Many costs can be buried in the internal expenses of the investment funds selected. Let's look at an example, two similar mutual funds but one charges a 1.25% internal expense while the other charges .25%. Both funds return 10%. On a $100,000 investment, the balance at the end of the year for the 1.25% fund would be approximately $108,750 as opposed to $109,750 on the .25% expense fund. Since you do not see these fees, it is important to understand that high expense ratios, 12b-1 fees, and excessive asset management fees can quickly add up. Here is a breakdown of some of our core funds and their respective expense ratio's.

Fund Name Expense Ratio
Schwab Total Stock Market Index Fund 0.03 %
Schwab Small Cap Index Fund 0.05 %
Schwab Short-Term Bond Market Fund 0.06 %
Schwab Treasury Inflation Protected Securities Index Fund 0.05 %
Schwab S&P 500 Index Fund 0.03 %
Schwab International Index Fund 0.06 %
Schwab Total Bond Market Fund 0.04 %
Schwab Fundamental International Large Company Index Fund 0.25 %
Schwab Fundamental US Large Company Index Fund 0.25 %
Schwab Fundamental Emerging Markets Large Company Index Fund 0.39 %

We invite you to view our complete fee schedule by requesting a proposal. If you have any questions, please contact us at 1.888.934.4015 x1!

Source: Schwab. Note: effective September 1, 2017.
*Schwab is a registered trademark of Charles Schwab & Co., Inc. Fundamental Index is a registered trademark of Research Affiliates, LLC. Minimums are subject to change. Investors should consider carefully information contained in the prospectus, or if available, the summary prospectuses, including investment objectives, risks, charges, and expenses. You can view, download, and print a prospectus. Please read the prospectus carefully before investing. Investment value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. The S&P 500 Index is an index of 500 widely traded stocks. It is not an investment product available for purchase. Charles Schwab & Co., Inc. (the distributor of Schwab Funds) and Charles Schwab Investment Management, Inc. (the investment advisor) are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Participant charges may also incur additional investment advisory and fiduciary fee.

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