Enter a balance, an annual contribution, a horizon and a hypothetical gross return, then two annual fee levels — say your current fund lineup versus a cheaper alternative. The tool grows the same portfolio under each fee and shows the two ending balances and the dollar cost of the difference. Because fees compound just like returns, small-looking percentages become large-looking dollars over decades.
Your portfolio and two fee levels
Hypothetical ending balances
Assumptions used — read these before trusting the number
- The gross return is hypothetical (default 7%/yr, constant, compounded annually). Real returns vary, include losing years, and are not guaranteed. This is an illustration, not a projection or promised return.
- Fees are modelled as a simple reduction of the annual return (net return = gross − fee), applied every year on the whole balance — the standard approximation the SEC's own investor bulletin on fees uses (investor.gov).
- Contributions are added at the end of each year and stay constant; taxes are excluded.
- Both scenarios assume the identical portfolio and identical gross return — this tool isolates the cost difference only. It says nothing about whether either option is a better investment, and a higher-fee option bundled with services you value can still be a reasonable choice. That judgment is yours.
- Find your real inputs: fund expense ratios are in each fund's prospectus or your plan's 404(a)(5) participant fee disclosure (your plan must provide it); advisory fees are in an adviser's Form ADV Part 2A. Ours are published here — run us through this tool too.
The "1% over 30 years" reality, honestly stated
At the defaults above — $100,000, $6,000/yr added, a hypothetical 7% gross — paying 1.00% instead of 0.25% costs roughly a fifth of the final balance over 30 years, well over $200,000. That arithmetic is why regulators publish fee-compounding warnings, and it cuts in every direction: it applies to fund expenses, plan costs, and advisory fees like ours. The fair question is never "is there a fee?" — it's "what do I get for it, and would I rather keep the difference?" We think clients should ask us that question with this tool open. Related reading: how compounding works and the rollover guide, since a job change is when most people can first act on plan costs.
This is an estimate, not advice. It isolates one variable — cost — under identical hypothetical returns. Real decisions should weigh investment options, services, protections and taxes alongside fees, against your own situation.
Common questions
Why does the contribution go in at the end of each year?
It is the conservative convention: the first year's contribution earns nothing. Front-loading would flatter both scenarios equally and change nothing about the gap between them.
Is the difference just the fees paid?
No — it is the fees plus the growth those fee dollars never earned. That is why the gap grows faster than the fees do, and why it widens with time.
Does a lower fee always win?
On identical gross returns, yes, by arithmetic. What a fee buys — or does not — is a separate question the tool cannot answer. What ours buys, and costs →
Want help reading your actual fee disclosure?
Bring your 404(a)(5) notice or a statement. We'll find the all-in number and put it through this math with you — free, fifteen minutes.