2% in fees over time

A 2% fee may sound small, but over time, it can significantly reduce a retirement portfolio due to the power of compounding losses.

Let’s take a look at the impact of a 2% fee over time:

Lower Annual Returns

Suppose your portfolio would earn 7% annually before fees. After a 2% fee, your actual return would only be 5% per year.

Compounding Losses

• If you invest $100,000 for 30 years

  • At 7% (No Fees): $761,225

  • At 5% (2% Fees): $432,194

  • Loss Due to Fees: ~$329,000

  That’s a 43% reduction in returns!

Impact of Contributions

• If you contribute $10,000/year for 30 Years

  • At 7% (No Fees): $944,607

  • At 5% (2% Fees): $697,608

  • Loss Due to Fees: ~$246,000

  Imagine the growth you’re losing out on!

Key Takeaways

• A 2% fee doesn’t just reduce your return by 2%, it can cut your portfolio by 40%+ over decades

• Lower-cost investment options (like index funds or ETFs with <0.5% fees) can save you hundreds of thousand of dollars in the long run.

• Always check expense rations, managements fees, and advisor fees to minimize costs.

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For educational purposes only.