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ROTH IRA Fees, how much is too much?
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kpaul
Posted 7/27/2016 15:18 (#5435451 - in reply to #5435405)
Subject: RE: ROTH IRA Fees, how much is too much?



north central Iowa, Hampton
That 2.5% should be a sales charge on the purchase of "Class A" shares. Is it too much? That depends. Some funds have a sales charge. Some don't. Some have good enough performance to justify that charge, some don't. If you're working with someone, it's possible to get an illustration of the growth of two different mutual funds. It's still kind of a crap shoot, since as the legal language says, "Past returns don't predict future performance."

With most mutual fund companies, as your investment grows, the sales charge for new purchases decreases. (you'd have to look in the prospectus for "rights of accumulation"
You only pay the charge on new purchases, reinvestment doesn't have a charge.
You don't pay the charge on existing shares.

There is a fee for all mutual funds, generally called the Expense Ratio which you can find in the prospectus. For many stock based funds, this ratio will run .6% to 1.4% annually. You don't see a bill on this, it's just the expense of paying salaries, making trades and printing stuff. It's absorbed before the final return is calculated.

Hope that helps.
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