How Fees Affect Your TSA
A TSA or 403(b) is an amazing way for public school employees to set aside money for retirement.
However, fees charged by some plans can take a big bite out of your earnings.
While a few extra percentage points in fees may seem insignificant, the effect on your account can be dramatic. It is important to understand exactly what you are paying and how it impacts your future savings.
Below is a list of fees that can affect your 403(b) returns.
403(b) fees to be aware of
Mortality and Expense Fee (M&E)
A charge levied by annuities to covers insurance related costs.
Commission (Loads)
A sales charge paid when an individual buys or sells an investment. Sales charges paid when an investment is purchased are called front-end loads. Sales charges paid when an investment is sold are called back-end loads. You want to look for no-load investments which do not charge any commission.
Expense Deductions
Charges for investment management, administration, and distribution services.
Management Fee
Also called the investment advisory fee, this represents the company's cost for managing the money in the fund.
12b-1 Fee
This charge generally allows distributors to compensate broker/dealers for selling their funds, with a payment to the representative who sold the fund. It also can be a charge to cover marketing and distribution costs of the investment.
Annual Contract Charge
A fee charged by a vendor for administrative expenses.
Custodial Fee
The charge for safekeeping or physically holding the securities in the fund.
Surrender Charge (Withdrawal Charge)
A fee charged by some annuities and funds when an investor takes money out of his or her account.
Wrap Account Fee
Charged by a personal financial advisor, this fee is expressed as a percentage of the client's assets under management. It is in addition to the other fees listed.
More about WEA TSA Trust Fees