skeeter
I didn’t believe it at first but that is correct. The 1.3% fee costs the investor $104,000 over the 50 years. I tested it in excel and got the same result. Here you go:
return 6.12% return with 1.3% fee 4.82%
year begin contrib bal earn end year begin contrib bal earn end
1 – 1,000.00 1,000.00 30.58 1,030.58 1 – 1,000.00 1,000.00 24.08 1,024.08
2 1,030.58 1,000.00 2,030.58 93.59 2,124.17 2 1,024.08 1,000.00 2,024.08 73.38 2,097.46
3 2,124.17 1,000.00 3,124.17 160.47 3,284.64 3 2,097.46 1,000.00 3,097.46 125.07 3,222.53
4 3,284.64 1,000.00 4,284.64 231.43 4,516.07 4 3,222.53 1,000.00 4,222.53 179.24 4,401.77
5 4,516.07 1,000.00 5,516.07 306.73 5,822.80 5 4,401.77 1,000.00 5,401.77 236.02 5,637.79
6 5,822.80 1,000.00 6,822.80 386.64 7,209.44 6 5,637.79 1,000.00 6,637.79 295.53 6,933.32
7 7,209.44 1,000.00 8,209.44 471.43 8,680.87 7 6,933.32 1,000.00 7,933.32 357.91 8,291.24
8 8,680.87 1,000.00 9,680.87 561.41 10,242.28 8 8,291.24 1,000.00 9,291.24 423.30 9,714.53
9 10,242.28 1,000.00 11,242.28 656.89 11,899.17 9 9,714.53 1,000.00 10,714.53 491.83 11,206.36
10 11,899.17 1,000.00 12,899.17 758.21 13,657.38 10 11,206.36 1,000.00 12,206.36 563.66 12,770.02
11 13,657.38 1,000.00 14,657.38 865.72 15,523.11 11 12,770.02 1,000.00 13,770.02 638.95 14,408.98
12 15,523.11 1,000.00 16,523.11 979.81 17,502.92 12 14,408.98 1,000.00 15,408.98 717.87 16,126.84
13 17,502.92 1,000.00 18,502.92 1,100.88 19,603.80 13 16,126.84 1,000.00 17,126.84 800.58 17,927.43
14 19,603.80 1,000.00 20,603.80 1,229.35 21,833.15 14 17,927.43 1,000.00 18,927.43 887.28 19,814.71
15 21,833.15 1,000.00 22,833.15 1,365.67 24,198.82 15 19,814.71 1,000.00 20,814.71 978.15 21,792.86
16 24,198.82 1,000.00 25,198.82 1,510.33 26,709.15 16 21,792.86 1,000.00 22,792.86 1,073.40 23,866.26
17 26,709.15 1,000.00 27,709.15 1,663.84 29,372.99 17 23,866.26 1,000.00 24,866.26 1,173.24 26,039.50
18 29,372.99 1,000.00 30,372.99 1,826.73 32,199.72 18 26,039.50 1,000.00 27,039.50 1,277.88 28,317.37
19 32,199.72 1,000.00 33,199.72 1,999.59 35,199.31 19 28,317.37 1,000.00 29,317.37 1,387.56 30,704.93
20 35,199.31 1,000.00 36,199.31 2,183.01 38,382.32 20 30,704.93 1,000.00 31,704.93 1,502.52 33,207.45
21 38,382.32 1,000.00 39,382.32 2,377.65 41,759.98 21 33,207.45 1,000.00 34,207.45 1,623.01 35,830.46
22 41,759.98 1,000.00 42,759.98 2,584.20 45,344.18 22 35,830.46 1,000.00 36,830.46 1,749.31 38,579.77
23 45,344.18 1,000.00 46,344.18 2,803.37 49,147.55 23 38,579.77 1,000.00 39,579.77 1,881.69 41,461.46
24 49,147.55 1,000.00 50,147.55 3,035.95 53,183.49 24 41,461.46 1,000.00 42,461.46 2,020.44 44,481.91
25 53,183.49 1,000.00 54,183.49 3,282.75 57,466.24 25 44,481.91 1,000.00 45,481.91 2,165.88 47,647.79
26 57,466.24 1,000.00 58,466.24 3,544.64 62,010.88 26 47,647.79 1,000.00 48,647.79 2,318.32 50,966.10
27 62,010.88 1,000.00 63,010.88 3,822.54 66,833.42 27 50,966.10 1,000.00 51,966.10 2,478.09 54,444.20
28 66,833.42 1,000.00 67,833.42 4,117.44 71,950.85 28 54,444.20 1,000.00 55,444.20 2,645.56 58,089.76
29 71,950.85 1,000.00 72,950.85 4,430.37 77,381.22 29 58,089.76 1,000.00 59,089.76 2,821.10 61,910.86
30 77,381.22 – 77,381.22 4,731.86 82,113.09 30 61,910.86 – 61,910.86 2,981.01 64,891.86
31 82,113.09 – 82,113.09 5,021.22 87,134.30 31 64,891.86 – 64,891.86 3,124.54 68,016.41
32 87,134.30 – 87,134.30 5,328.26 92,462.56 32 68,016.41 – 68,016.41 3,274.99 71,291.40
33 92,462.56 – 92,462.56 5,654.09 98,116.65 33 71,291.40 – 71,291.40 3,432.68 74,724.08
34 98,116.65 – 98,116.65 5,999.83 104,116.48 34 74,724.08 – 74,724.08 3,597.96 78,322.04
35 104,116.48 – 104,116.48 6,366.72 110,483.20 35 78,322.04 – 78,322.04 3,771.21 82,093.25
36 110,483.20 – 110,483.20 6,756.05 117,239.25 36 82,093.25 – 82,093.25 3,952.79 86,046.04
37 117,239.25 – 117,239.25 7,169.18 124,408.43 37 86,046.04 – 86,046.04 4,143.12 90,189.15
38 124,408.43 – 124,408.43 7,607.58 132,016.01 38 90,189.15 – 90,189.15 4,342.61 94,531.76
39 132,016.01 – 132,016.01 8,072.78 140,088.79 39 94,531.76 – 94,531.76 4,551.70 99,083.47
40 140,088.79 – 140,088.79 8,566.43 148,655.22 40 99,083.47 – 99,083.47 4,770.87 103,854.33
41 148,655.22 – 148,655.22 9,090.27 157,745.48 41 103,854.33 – 103,854.33 5,000.59 108,854.92
42 157,745.48 – 157,745.48 9,646.14 167,391.62 42 108,854.92 – 108,854.92 5,241.36 114,096.29
43 167,391.62 – 167,391.62 10,236.00 177,627.62 43 114,096.29 – 114,096.29 5,493.74 119,590.02
44 177,627.62 – 177,627.62 10,861.93 188,489.55 44 119,590.02 – 119,590.02 5,758.26 125,348.28
45 188,489.55 – 188,489.55 11,526.14 200,015.68 45 125,348.28 – 125,348.28 6,035.52 131,383.80
46 200,015.68 – 200,015.68 12,230.96 212,246.64 46 131,383.80 – 131,383.80 6,326.13 137,709.93
47 212,246.64 – 212,246.64 12,978.88 225,225.52 47 137,709.93 – 137,709.93 6,630.73 144,340.66
48 225,225.52 – 225,225.52 13,772.54 238,998.06 48 144,340.66 – 144,340.66 6,950.00 151,290.67
49 238,998.06 – 238,998.06 14,614.73 253,612.80 49 151,290.67 – 151,290.67 7,284.65 158,575.31
50 253,612.80 – 253,612.80 15,508.42 269,121.22 50 158,575.31 – 158,575.31 7,635.40 166,210.71