Money Pile Moritz Wickendorf
Source: Wikimedia Commons user Moritz Wickendorf.

When it comes to saving for retirement, many people struggle to find every penny they can to set aside for their golden years. Yet billions of dollars of Americans' retirement savings gets sucked out of their accounts each and every year, and the astounding thing is that so many retirement savers are utterly clueless it's even happening. Given how important this drain on your retirement savings is, it's crucial to understand exactly what's happening and what you can do to take control of your retirement planning.

Most retirement investors use IRAs, 401(k) plans, or other strategies to take advantage of tax benefits for retirement saving. Yet nearly half of those who are at or approaching retirement age mistakenly believed that they didn't have to pay anything in order to take advantage of those strategies, according to a recent online survey from RebalanceIRA. If you're using these vehicles to help you save for retirement, you shouldn't necessarily stop using them -- but you should take action to make sure no more of your hard-earned money than absolutely necessary gets sucked out of your nest egg by greedy financial providers.

Retire Stockmonkeys

Source: StockMonkeys.com, Flickr.

How investors get nickeled and dimed
The problem with investment-related fees on retirement savings is that it's often hard to see exactly what you're paying. The majority of Americans have access to mutual funds in their IRAs or 401(k)s, and if you use them, then you'll pay management fees, advisory fees, and sometimes sales charges and other miscellaneous costs. Yet you won't see a specific dollar amount on your account statement that reflects how much those fees amounted to. Instead, the mutual fund provides basic, generic information on expense ratios and typical fees for holding periods of one to 10 years in their required prospectus materials, and the fund company is permitted simply to take money out of the fund's assets to reimburse its expenses. That leaves the only evidence of money exiting the fund being the slight reduction in overall returns that investors will see in a fund's performance numbers.

Financial institutions add to the confusion by making claims in their marketing materials that consultations are free or have no fee involved. Although it's true that many of those companies don't charge anything extra for consultations, and often will receive nothing if you choose not to invest your money with them, it's misleading to say that those services are free when the professionals you're working with could end up getting a commission or ongoing stream of revenue from the investments they recommend to you.

In fact, over time, the amount you'll pay in fees far outweighs any reasonable estimate of the value of the services financial professionals will render on your behalf. One survey in 2013 found that typical households will pay more than $150,000 during their lifetimes in 401(k)-related fees alone, taking away about a third of the profits they'd otherwise have gotten from their retirement investments. Adding in similar fees on savings outside your 401(k) only magnifies the problem.

Broker Laurmg Wiki
Source: LaurMG via Wikimedia Commons.

If you trade stocks or other individual securities, it's often easier to see exactly how much you have to pay in related fees. Commission charges are usually clearly shown on trade tickets and regular statements, and administrative fees charged by brokers also appear prominently in most cases.

Even those who rely solely on employer-sponsored retirement accounts often erroneously believe that they don't bear the brunt of administrative and record-keeping expenses. It's relatively uncommon for participants to pay an actual fixed dollar amount as a fee for their retirement account. What often happens instead is that employers arrange to offer investment options that include money that can be used to cover administrative expenses, effectively siphoning off investment returns to help maintain the plan rather than making those fees as transparent as possible.

The simple solution
The first step to stopping this inexorable drain on your retirement savings is simply to know about it. But next, you have to take action. In your 401(k), make sure you're focusing as much as possible on any low-cost alternatives the plan provides. In an IRA or other outside account, you have a lot more latitude to choose exactly the investment you want, so you can avoid the highest-fee products in favor of similar options that carry lower investment costs.

Given how uncertain most Americans are about having enough money to retire comfortably and with as much financial security as they want, every penny of your savings that goes to a financial institution is a drain on your comfort level. By taking greater control of your money and choosing low-fee options for the bulk of your investing, you can usually end up in much better shape to tackle the challenges of a successful financial plan for your retirement.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.