In contrast, the average U.S.-listed passive index-based stock ETF has a 0.56% expense ratio, according to XTF data. [What an All-ETF Portfolio Does for You]

Moreover, some broad stock market ETFs come with dirt cheap fees. For instance, the Schwab U.S. Broad Market ETF (NYSEArca: SCHB) is the cheapest offering with a 0.04% expense ratio and Vanguard Total Stock Market ETF (NYSEArca: VTI) has a 0.05% expense ratio.

Over time, the low fees would help the investor keep more of his or her money due to compounding. Bogle calculates that a 30-year-old worker who earns $30,000 per year with a 3% annual raise could retire at age 70 with $927,000 if the market returned an average 7% by saving 10% of his or her wages every year in a passive index fund. In contrast, the investor would only generate $561,000 in the same scenario if he or she held a typical actively managed fund.

For more information on investing toward retirement, visit our retirement category.

Max Chen contributed to this article.

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