Fees make a big differance

‘The 50 Crucial Answers You Need’ is a new pocket guide to savings and retirement.

In an extract from her book author Anna Lampe outlines the impact fees and commissions can have on your savings.

Then there are the layers of fees that are charged on retail funds, including contribution fees (which can be as much as 5 per cent), an adviser fee, an administration fee and a management fee. As Lampe says, fees that are charged on a percentage basis will increase in dollar terms as your fund balance grows.

Take, for example, an opening balance of $50,000 and a salary of $55,575 and management fees of 1 per cent a year. The end result is $359,000 over 30 years compared to $298,000 if the fees were 2 per cent a year instead.

http://www.smh.com.au/news/planning/top-tips-for-retirement/2007/06/18/1182019025723.html

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