Move over, 401(k): IRA fees are what really hurt

Move over, 401(k): IRA fees are what really hurt

You've likely heard the complaint: Retirement plan fees are too high and are cutting into your long-term investment returns. Even if you haven't heard it directly from Jack Bogle—and didn't see the "Frontline" examination in which the Vanguard Group founder was featured lambasting the 401(k) industry for fee-gouging—you've probably been convinced somewhere along the way that 401(k) fees are excessive.

But what about individual retirement accounts (IRAs)? If you don't hear as much about high IRA fees, you should listen up.

Here's one big reason: There is more money in IRAs than in 401(k) plans in the U.S., and that means more opportunity for Americans to give away more of their long-term returns to fees if they aren't careful. At the end of 2012, $5.4 trillion was invested in IRAs, versus $5.1 trillion in defined contribution plans—the plan type that includes 401(k)s, according to the Investment Company Institute.

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