Question 1

What is the Compounding Cost Calculator?

Accepted Answer

The Compounding Cost Calculator is a free tool from M1 that models how investment fees compound against your portfolio value through retirement. Upload your portfolio data through Plaid or enter it manually to see a personalized projection — including the impact of expense ratios, 401(k) plan administration costs, and advisor fees. The calculator also identifies comparable low-cost ETFs with similar market exposure to your higher-cost holdings, so you can see exactly what your fees are costing you and what alternatives exist.

Question 2

What are the fees involved in retirement?

Accepted Answer

Retirement fees can come from 401(k) fees, financial advisor fees, and high-cost ETFs. Many people have 401(k)s from former jobs and don’t realize they’re still paying a fee to maintain that account. That fee may be fixed or a percentage of your assets, which eats away at your compounding earnings even more. Some people use financial advisors for retirement planning and don’t realize how much of their earnings are lost to the advisor’s fee. And many retirement plans consist of higher-cost ETFs, even though similar, low-cost alternatives exist. A lower cost approach may extend your retirement savings by up to 10 years.

Question 3

I have a financial advisor that I trust. Is this tool for me?

Accepted Answer

Absolutely. A financial advisor can help you plan, understand, and save for retirement. However, it's important to understand their fee structure and how much you'll pay them long-term. An advisor who takes a 1% annual fee starts to add up—as your wealth grows, so does their cut. This tool can help see the total cost of an advisor and its effect on your wealth.

Question 4

I have 401(k)s from my current and previous employers. Should I be concerned about fees?

Accepted Answer

Sometimes employers cover fees while you're working for them, but you often assume that responsibility once you leave. 401(k) plan fees can be fixed or based on a percentage of your assets. Those fees can eat away at the compounding earnings—as well as the initial balance invested if left unchecked.

Question 5

I choose my own investments and manage my own portfolio. Why do I need this tool?

Accepted Answer

Many ETFs carry high fees (expense ratios) that affect your returns. This tool can help you compare other low-cost funds that may give you similar exposure in the market. That way, you can decide if your higher-cost funds really justify the fees.

Question 6

Why should I use M1?

Accepted Answer

M1 is a financial platform for wealth-builders with a long-term vision. You can open a Traditional IRA, Roth IRA, or an SEP IRA on M1. We also offers taxable accounts, including individual brokerage, joint brokerage, and trust accounts. Choose from thousands of low-cost securities, including ETFs from major providers (such as Vanguard, Fidelity, iShares). You pick your holdings, allocation, and investing schedule—then we’ll automate the busy work of calculating your buys. And if you choose to roll over a retirement account from an old job, you’ll enjoy personalized service to make the transition simple and stress-free.

Question 7

Do I have to open an M1 brokerage account to use this tool?

Accepted Answer

No. This tool is free to use if you enter your details manually. If you choose to connect a retirement account through Plaid, we’ll get you set up with an M1 username and password in order to protect your financial data. You’ll have access to M1’s planning tools, including the Compounding Cost Calculator—but you do not need to open a brokerage account to access this data.

COMPOUNDING COST CALCULATOR

Are you leaving money on the table?

Forgotten 401(k)s, advisor costs, and high-cost holdings could be eating into your retirement. Find out how much with the Compounding Cost Calculator.

Don't let fees go unnoticed

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