2. 401(k) Expense Ratios

Many employers offer 401(k)s, but many of the employees who contribute to these retirement savings plans don’t know that they aren’t free. Depending on the funds you choose, you could be stuck with some pretty high expense ratios that will slowly drain your retirement savings.

What’s even worse is that these expense ratios may not be explicitly stated to you, but rather buried in the fine print. This hidden cost may be between 0.5% and 2%, which doesn’t seem like much. However, a 2% expense ratio accumulates at an exponential rate in the long run, which can work hard against you.

This being said, when choosing funds for your 401(k), look for those with low expense ratios to avoid losing money in hidden costs and fees.