What are the fees really costing you?
A 1% fee sounds like nothing. Over a thirty-year climb it can quietly eat a sixth of your pot. And in much of Europe there’s a second, sneakier leak: dividend tax on distributing funds. Put your numbers in and see both, in euros.
Explain it like I’m five
A fund takes a tiny slice of your money every year: one euro in every hundred, sometimes far less. It’s cut every single year, and every slice stops growing for you. Over thirty years the little slices eat a big piece of the pot. This page counts them in euros.
New to all of it? This idea is stop 5 of Start from zero: ten short lessons that assume nothing.
The Fee Drag
Accumulating vs distributing
A distributing fund pays dividends out as cash, and many countries tax that the year it arrives. An accumulating fund rolls them up inside the fund; where the personal tax waits until you sell, decades of deferral compound. Some countries tax accumulating funds yearly anyway: if yours does, this gap shrinks toward nothing.
What the fee costs
€56,703
A 0.50% fee quietly takes 7% of the pot you’d have kept with no fees, over 25 years, on these numbers.
And a distributing fund leaks another €54k to dividend tax on the way: money an accumulating fund would still have working for you.
Illustrative, steady-return maths in real terms. It compares fund structures, not specific funds, and names none. The accumulating column assumes your country taxes cash payouts now but waits until sale for accumulating funds; a few tax funds yearly either way. Dividend tax varies by country and account type. Treat it as a shape, not a quote. Not advice.
This is the arithmetic, with no fund names attached. To see it in real funds (the actual ETFs on one index, and what the gap between them costs you), open The Tracking Gap
The Fee Drag prices the fee you can see, and the tax you pay when a fund distributes. The Domicile Tax prices the withholding taken inside the fund first, by structure. The Domicile Tax
Common questions
- 0.5% sounds tiny. How is it thousands of euros?
- Because it’s charged every year on your whole pot, and the money it takes would have kept growing too. Over decades that compounds into a real dent: a 0.5% fee quietly eats a chunk of the pot you’d otherwise have kept. Small percentage, big number.
- What’s a “fund fee (TER)”?
- The yearly cost of owning a fund, taken automatically off its value; you never get a bill. 0.5% means €5 a year for every €1,000 invested. It’s the one cost you fully control: cheap index funds exist for a fraction of that.
- Accumulating or distributing: what’s the difference, and does it matter?
- Accumulating funds reinvest dividends inside the fund; distributing funds pay them to you as cash. If your country taxes dividends on receipt, distributing can mean a tax bill every year on money you may not need yet. Accumulating keeps the income inside and often changes the timing, but whether there's still a yearly bill depends on your country and account. It matters more in Europe than most guides admit, and the choice changes shape again once you retire: Living off it covers that side.
- Are these the real tax numbers for me?
- No. The dividend tax here is a shape, not a quote. It varies a lot by country and by the account you hold the fund in. Use it to see how much the leak can matter, then check your own rate.
On the map: 04 · Keep more of it
Nothing here is financial, investment, medical or retirement advice: it’s arithmetic and education. The calculators use the numbers you enter, The Exit Rehearsal compares your own Plan and Reality without interpreting either, and The Spare Key prices the fallback you enter without recommending one. Some tools remember work in the browser, some can place a scenario in the page address, and the Rehearsal and the Spare Key stay in this browser unless you print them, download them, or keep them in your account. Each tool tells you what it keeps and where. Decisions about your money are yours, ideally with a licensed adviser. I’m happily not one.
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