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IRA Investors Put Their Money Into This Low-Cost Asset

What Is an IRA?An individual retirement account (IRA) is a retirement savings vehicle that provides multiple tax advantages.

What Investors Should Know?A small difference in expense ratios can add up over years, so choosing low-cost investments is crucial to protecting your nest egg.

In a recent SmartAsset study, we compared two hypothetical funds that have identical rates of return (6%) but have different expense ratios.

Fund A charges 0.15% in fees, while Fund B charges 0.75%. Each fund started with $10,000 in investment.

The seemingly tiny difference between the expense ratios of Fund A (0.15%) and Fund B (0.75%) added up to thousands of dollars over the course of 30 years.

Like any investor, IRA savers accrue expenses and fees when investing in the underlying assets in their accounts.

 A minimal difference in fees can add up to thousands of dollars over years. But IRA investors are tamping down on this cost by investing in low-cost mutual funds.

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