Key Data and Analysis
Total cost of 1.0% vs 0.03% ER by starting age on $50,000
| Starting Age | Horizon | Cost of 1% vs 0.03% on $50K | As % of Investment |
|---|---|---|---|
| 25 (40 years) | 40 years | $270,000 | 540% |
| 35 (30 years) | 30 years | $130,000 | 260% |
| 45 (20 years) | 20 years | $62,000 | 124% |
| 55 (10 years) | 10 years | $26,000 | 52% |
⚠️The 25-Year-Old Fee Time Bomb
A 25-year-old paying 1% ER on $50,000 for 40 years pays $270,000 more in fees than the 0.03% alternative — 540% of the original investment. Time is the young investor’s greatest asset and greatest fee vulnerability.
Scenarios and Comparison
Annual and 20-year fee savings from 0.75% to 0.03% switch by age
| Age | Typical Portfolio | 0.75% Annual Fee | 0.03% Annual Fee | 20-Year Savings |
|---|---|---|---|---|
| 25 | $15,000 | $113 | $4.50 | $16,000 |
| 35 | $100,000 | $750 | $30 | $54,000 |
| 45 | $300,000 | $2,250 | $90 | $86,000 |
| 55 | $600,000 | $4,500 | $180 | $72,000 |
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