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How to lower your 403(b) plan fees & fund costs

Why pay more when you can make a smart choice for your retirement savings? Consider the benefits of investing with Vanguard.

Transparent recordkeeping fees

Our fees are clear and straightforward. While some 403(b) providers may charge many types of fees—fees you may not even realize you're being charged—Vanguard has just 2:

Plan participants will never find a hidden fee or charge. That means no front- or back-end loads, commissions, surrender charges, or asset-based administration "wrap" fees. And we don't charge you for taking a distribution from your account, as many of our competitors do.*

Plan sponsors have 2 options for paying the recordkeeping fee: as a direct plan sponsor expense, or through automated deductions from participant accounts. If applicable, a plan using a third-party administrator (TPA) may charge a TPA fee, which the plan sponsor can deduct from participant accounts.**

Why it's important to understand 403(b) fees

To get the true story about fees, look at the total, all-in plan price. As the chart shows, our competitors can charge twice as many individual fees.

When you compare the total amount paid for all plan service and investment fees, Vanguard 403(b) Services ranks among the lowest-cost 403(b) plans available.

Compare Vanguard fees with the competition***


Flat recordkeeping

FEES OTHERS MAY CHARGE

Yes

FEES VANGUARD CHARGES

Yes


FEES OTHERS MAY CHARGE

Yes

FEES VANGUARD CHARGES

No


FEES OTHERS MAY CHARGE

Yes

FEES VANGUARD CHARGES

No


Miscellaneous†

FEES OTHERS MAY CHARGE

Yes

FEES VANGUARD CHARGES

No


FEES OTHERS MAY CHARGE

Yes

FEES VANGUARD CHARGES

Yes


Commissions

FEES OTHERS MAY CHARGE

Yes

FEES VANGUARD CHARGES

No


FEES OTHERS MAY CHARGE

Yes

FEES VANGUARD CHARGES

No


FEES OTHERS MAY CHARGE

Yes

FEES VANGUARD CHARGES

No

Low fund costs

The Vanguard average expense ratio for mutual funds is 84% less than the industry average.†† Vanguard mutual funds cost you only what they cost us to run them. Nothing more.

For investors, that can mean more potential returns because every penny you save in fund costs is a penny that stays in your account, where it can grow tax-deferred.

Because costs and fees can cut directly into investment returns, it's important to know what your funds cost—whether you're an employer choosing a plan or an employee who may have a choice of providers.

Target retirement funds

Vanguard Target Retirement Funds offer a complete portfolio in a single fund. With Vanguard 403(b) Services, you have access to our lowest-cost target retirement funds—Vanguard Institutional Target Retirement Funds. There are no fund minimums.

Admiral Shares

Vanguard 403(b) Services has the added benefit of offering additional cost savings through the Admiral™ Shares of our mutual funds with no minimum investment required.

We're here to help

PLAN SPONSORS

Call 877-859-5756

PLAN PARTICIPANTS

Call 844-859-0275

Monday through Friday
8 a.m. to 8 p.m., Eastern time


Make retirement saving easy

If you don't know how to start saving for retirement, we can help you figure out how much you'll need and how to balance all your savings goals.

Consolidate your accounts

Consider moving accounts you hold elsewhere to Vanguard. You'll enjoy more control of your portfolio now and get a clear picture of your investment strategy.

Use our handy tools

You're putting money away for your future, but how do you know if it will be enough?

REFERENCE CONTENT

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Plan participant

Anyone who contributes to a retirement plan, or is retired and receiving benefits from it.

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Expense ratio

The annual operating expenses of a mutual fund or ETF (exchange-traded fund), expressed as a percentage of the fund's average net assets. It's calculated annually and removed from the fund's earnings before they're distributed to investors, directly reducing investors' returns. For example, if you had $10,000 invested in a fund with an expense ratio of 0.20%, you'd pay about $20 a year out of your investment returns.

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Front/back-end load

A fee paid to the investment company when you buy an investment on the "front end" or sell it on the "back end."

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Commission

A fee charged by a broker for buying and selling securities.

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Surrender charge

A fee that may be charged on early withdrawals from an insurance or annuity contract or to cancel the agreement.

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Plan sponsor

An employer that establishes a retirement plan to benefit its employees.

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Third-party administrator (TPA)

An individual or organization hired by a plan sponsor to run the retirement plan selected by the sponsor.

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Distribution-processing

A fee charged to cover processing costs when you take a distribution from an account.

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Front/back-end load

A fee paid to the investment company when you buy an investment on the "front end" or sell it on the "back end.

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Surrender fee

Lower your 403(b) fees & fund costs at Vanguard.

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Mutual fund

A type of investment that pools shareholder money and invests it in a variety of securities. Each investor owns shares of the fund and can buy or sell these shares at any time. Mutual funds are typically more diversified, low-cost, and convenient than investing in individual securities, and they're professionally managed.

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Tax deferral

Delaying the payment of income taxes on income. For example, owners of traditional IRAs do not pay income taxes on the interest, dividends, or capital gains accumulating in their retirement accounts until they begin making withdrawals.

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Expense ratio

The annual operating expenses of a mutual fund or ETF (exchange-traded fund), expressed as a percentage of the fund's average net assets. It's calculated annually and removed from the fund's earnings before they're distributed to investors, directly reducing investors' returns. For example, if you had $10,000 invested in a fund with an expense ratio of 0.20%, you'd pay about $20 a year out of your investment returns.

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Asset-based administration fee

A fee determined by deducting a percentage of the assets held in an account. Although the percentage stays the same, the dollar amount deducted changes as the account balance changes.