How much will you pay in investment fees over your lifetime?

You may or may not know how much you’re paying for investment advice. But you are almost certainly not aware of how quickly those fees can add up when saving for major goals like

Imagine Graham starts to save when he is 33 years old, back in 1993, when his salary is $35,000. His earnings grow over time, but he remains firmly in the middle-income category. Graham saves 10 per cent of his income in an RRSP for 12 years. He increases that rate to 15 per cent for the next 12 years and in his last six years of work saves 20 per cent of his pay. During this entire time, Graham is earning an investment return based on a 60/40 asset mix – 60-per-cent stocks and 40-per-cent bonds – less 1.8 per cent for investment fees.

This 1.8-per-cent fee level is typical of a retail portfolio made up of mutual funds that are actively managed. We use actual returns for the past and assume a 6-per-cent return before fees for the future. Graham’s savings peak at $615,000 at age 63, when he is on the brink of retirement. But how much has he paid in investment fees?

Now imagine those investment fees were stashed in a fund that earned 4 per cent a year. The chart above shows what would have been the case by age 90, Graham’s last full year of life. Because Graham was drawing a steady income during his retirement years, his savings had dwindled to $40,000 while the fees that Graham had paid over the years would have accumulated to $800,000, more than he ever amassed in savings.

Source: News Formal (newsformal.com)

Retirement Cent Graham Savings Graham Years Fees Return Time Frederick Vettese Morneau Shepell PERC

Canada Latest News, Canada Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Bitcoin network fees doubles as BTC closes in on $70KThe Bitcoin network fees for the week rose by about 122%, going over $30 million, but there has been an overall decline.
Source: CryptoAmb - 🏆 22. / 68 Read more »

Ethereum’s Dencun killing L2 fees by 92%: Will Optimism, ARB pump now?Leading layer 2 networks have witnessed a significant drop in transaction fees in the past 24 hours following the successful deployment of...
Source: CryptoAmb - 🏆 22. / 68 Read more »

VanEck’s Bitcoin ETF Sees $200 Million Inflow After Waiving FeesInvestors have poured over $200 million into VanEck’s spot Bitcoin exchange-traded fund after it waived fees for the first $1.5 billion in assets until the end of March next year.
Source: BNNBloomberg - 🏆 83. / 50 Read more »

Galapagos Islands to double tourist entry feesTourists to the Galapagos Islands will be asked to pay twice as much in entry fees from this year amid concerns that a rise in visitor numbers is putting pressure on the ecologically sensitive destination.
Source: CTVNationalNews - 🏆 82. / 51 Read more »

Visa, Mastercard reach US$30 billion settlement over credit card feesVisa and Mastercard reached an estimated US$30 billion settlement to limit credit and debit card fees for merchants, with some savings likely to be passed on to consumers through lower prices.
Source: CTVNews - 🏆 1. / 99 Read more »

Ethereum fees plunge since Dencun, but the reason is not what you thinkTransaction fees on the Ethereum mainnet have dipped sharply since the Dencun Upgrade, with the transaction count remaining roughly the same.
Source: CryptoAmb - 🏆 22. / 68 Read more »