When it comes to saving for retirement, most people know two things: they want their money to grow, and they don’t want to pay too much in fees. Both are important, but here’s the key point: what really matters is your net investment performance - what you actually take home after fees.
It’s easy to get caught up in comparing fees between funds. A lower fee can feel like a win, and sometimes it is. But if that lower-fee fund consistently delivers lower returns, you could end up worse off in the long run.
Let’s put it in perspective:
If Fund A charges slightly higher fees but delivers stronger, consistent returns, your balance after 10, 20, or 30 years could be significantly larger than if you’d focused only on the cheapest option.
On the other hand, a fund with rock-bottom fees but lacklustre performance won’t grow your retirement savings as effectively.
At the end of the day, your retirement lifestyle won’t be funded by the fee percentage you saved - it will be funded by the dollars sitting in your account when you stop working.
So, what should you focus on?
Net performance: Look at the returns after fees and tax. That’s your true growth.
Consistency: A history of steady performance over time can be more valuable than chasing short-term highs.
Suitability: Make sure the fund’s risk level matches your goals and comfort with ups and downs.
Fees do matter - nobody wants to overpay. But focusing only on fees can be misleading. A better approach is to weigh fees in the context of long-term performance.
Retirement saving is a marathon, not a sprint. The winner isn’t the fund with the lowest costs, but the one that helps you cross the finish line with the strongest balance.
Let’s talk about your plans and get you focused on what really matters.