Retirement planning is meant to provide peace of mind, but what if the savings you’ve worked so hard to build were quietly shrinking?

Many savers assume their 401(k) accounts are safe, but changes in account management could leave some vulnerable to unexpected losses.

Without even realizing it, you could be facing fees that eat away at your savings over time.

The risk of Safe Harbor IRAs​

Safe Harbor IRAs were designed to handle abandoned or forgotten 401(k) accounts, typically when an employee leaves a job.

Many workers don’t realize their retirement funds have been moved to one of these accounts.

Employers are allowed to "force out" accounts with balances under $7,000 and transfer them to a Safe Harbor IRA—without the former employee’s consent.

As job-hopping becomes more common, with the average worker changing jobs about 12 times in their lifetime, the number of these accounts is expected to grow significantly.

The cost of high fees​

Safe Harbor IRA providers charge monthly fees ranging from $1 to $5.

Over time, these small fees can steadily erode the account’s value.

By comparison, traditional 401(k) plans have an average annual fee of 0.85 percent.

One Safe Harbor IRA analyzed by PensionBee charged a monthly fee of $5.67, plus an annual fee of 0.5 percent of the total assets.

For a $3,500 account, that would add up to an annual deduction of $85.54—about 2.4 percent of the account’s value.

At this rate, the account could be depleted within 40 years, even faster if there are market losses or withdrawals.

Low returns worsen the problem​

Many Safe Harbor IRA providers pay interest rates below 1 percent.

This is significantly lower than the average interest rate of around 4 percent, making it difficult for account balances to grow over time.

Without strong returns, these fees can have an even greater impact, reducing savings at an alarming rate.

How to protect your retirement savings​

Experts at PensionBee encourage workers to actively monitor their retirement accounts.

Regularly checking on old 401(k)s and choosing a provider with better returns and lower fees can help prevent unnecessary losses.

Employers are also urged to carefully research providers before transferring former employees' accounts to Safe Harbor IRAs.

If they don’t, they could face reputational damage—or even liability—for placing workers’ savings in poorly performing accounts.

A cautionary message from financial experts​

Romi Savova, CEO of PensionBee, warned about the dangers of unchecked fees:

"Life often gets in the way of retirement planning, and everyday savers could find their workplace savings forced into poorly performing accounts."

"After saving responsibly into their workplace 401(k), employees expect to be able to build up their nest eggs over time."

"Imagine the horror of finding your nest egg whittled down to nothing by rip-off fees and low returns."

The importance of diversification​

While 401(k) plans are a cornerstone of retirement savings, financial experts warn against relying solely on one type of account.

Financial planner Georgia Lord advises that tax laws change frequently, and diversifying retirement accounts can provide greater flexibility and protection against unexpected tax burdens.



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Your retirement savings should be a source of security—not a hidden financial trap. By staying informed and taking action, you can ensure your hard-earned money lasts for years to come.
Have you ever discovered unexpected fees in your retirement accounts? How do you keep track of multiple 401(k)s from past jobs? Join the conversation in the comments below and share your insights!

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