1. What Are IRA Fees?

IRA fees are the costs associated with maintaining and managing your Individual Retirement Account. These typically include investment expense ratios and administrative fees charged by your IRA provider.

2. How the Calculator Works

The calculator uses the following formula:

Where:

• \( AUM \) — Assets Under Management in USD
• \( Expense\ Ratio \) — Annual fee expressed as a decimal (e.g., 0.0015 for 0.15%)
• \( Admin\ Fees \) — Fixed administrative fees in USD

Explanation: The formula calculates the total annual fees by multiplying your account balance by the expense ratio and adding any fixed administrative fees.

3. Understanding the Components

Expense Ratios: These are ongoing fees charged by mutual funds or ETFs, typically ranging from 0.03% to 1% annually.

Administrative Fees: These are account maintenance fees charged by the IRA provider, often $20-$100 annually.

4. Using the Calculator

Tips: Enter your total IRA balance in USD, the expense ratio as a decimal (e.g., 0.0015 for 0.15%), and any fixed administrative fees in USD.

5. Frequently Asked Questions (FAQ)

Q1: Are IRA fees tax-deductible?
A: Generally no, but some employer-sponsored plans may allow deduction of certain fees.

Q2: What's a reasonable expense ratio?
A: For index funds, under 0.20% is good. For actively managed funds, under 0.75% is reasonable.

Q3: Can I avoid IRA fees?
A: Some providers offer no-fee IRAs, but investment funds will still have expense ratios.

Q4: How often are these fees charged?
A: Expense ratios are charged daily but calculated annually. Admin fees are typically annual.

Q5: Do fees vary by IRA type?
A: Traditional and Roth IRAs typically have similar fee structures at the same provider.