Expense Ratios Compound: The Quiet Cost Inside 401(k)s and Funds
How a 0.05% vs 1.00% expense ratio can change retirement balances over 20–30 years.
Updated 2026-07-15 · Not financial advice
Fees compound against you
An expense ratio is charged continuously as a fraction of assets. Small differences look tiny in a year and large across decades.
Plan admin fees, revenue sharing, and high-cost funds can stack. FeeFriction’s 401(k) fee drag calculator isolates expense-ratio math for education.
What the calculator cannot know
Your plan’s exact fee menu, employer match rules, and fund performance are account-specific. Always read plan fee disclosures.
Lower fees do not guarantee higher returns; they reduce a structural drag that is otherwise easy to ignore.
Related tool: 401k fee drag
Sources
Frequently Asked Questions
Is a 1% fee “high”?
In broad US index equity funds, all-in costs are often much lower. Context depends on asset class and active vs passive strategy — compare within category.