future = principal * (1 + interest) ^ periods So some basic math to show how much a 2% yearly fee costs you: In[2]:= 100000 * (1 + 0.07)^50 Out[2]= 2.9

future = principal * (1 + interest) ^ periods So some basic math to show how much a 2% yearly fee costs you: In[2]:= 100000 * (1 + 0.07)^50 Out[2]= 2.9457*10^6 In[3]:= 100000 * (1 + 0.05) ^50 Out[3]= 1.14674*10^6 In[4]:= Out[2] - Out[3] Out[4]= 1.79896*10^6 In[5]:= Out[4] / Out[2] Out[5]= 0.610707 So you lose 61.07% of your 401k balance to these yearly fees reducing your effective interest rate. The 100k example isn't accurate, it's just trying to give people a sense of how much they'd be losing.. However - this article doesn't really do the full benefit calculation of company matching, effective interest rates of other types of accounts, etc.