From the

Bogleheads wiki:A reasonable rule-of-thumb is to consider investing in a taxable account if the product of the extra costs and the number of years you will stay in the plan exceeds one and a half times your combined federal and state tax rates on qualified dividends over your working career. That is, if you pay 1.70% expenses rather than 0.20%, and you pay 15% federal tax on qualified dividends, plus 5% state tax, you should still invest in the plan unless you are reasonably certain that you will stay with the employer for more than 20 years for a net loss of 30% (actually 26% because of compounding). If you pay no state tax, you should still invest in the plan unless you are reasonably certain you will stay more than 15 years.

The reason for the rule of thumb is that a long-term investment, even in a tax-efficient stock fund, is likely to lose more than your tax rate to taxes. You will pay tax every year on the dividends, continue to pay that tax after you leave the employer, and then pay capital-gains tax on most of the investment value when you sell the fund over the course of your retirement. (And if you retire in a 15% tax bracket and thus pay no capital gains on the fund sale, the lower tax bracket will also reduce the tax due on withdrawals from a 401(K), for a comparable tax savings.) [note 1]

If you post your actual marginal income tax rates OP, I don't mind showing all the calculations for you. I've kinda wanted to have a post written about this so that I can refer back to it in the future. This is a somewhat common question.

Now you may end up deciding not to invest in your SIMPLE IRA, but I think answer your question of which share class to choose (in the event you do decide to continue to invest in your SIMPLE IRA) is an interesting one.

I've attached a graph. It plots the proportion of money retained after fees vs time.

The intersection point is at the end of the 8 year mark.

How I derived this:

l = load fee

r = raw return, before expenses and fees

e = expense ratio

y = years

FV = future value

PV = Present Value

---

<First a bit of an aside>

Most people like to say Oh if the underlying assets grow 6%, and my fees are 1%, then I see 5% growth. This is

* almost* true, but not quite.

What most people are saying is

FV = PV * (1+r-e)^y

The correct answer is

FV = PV * [(1+r)*(1-e)]^y. = PV*(1 +r -e - re)^y

But re is negligible compared to e or r except for very rare circumstances. So normally we ignore this and just use the first formula. However I will be using the second formula as it makes analysis easier.

<end aside>

When we have funds with load fees, our FV equation is now

FV = PV * (1-l) * [(1+r)(1-e)]^y

We can rewrite this as

FV = (1+r)^y * PV * (1-l)*(1-e)^y

I did this because r, the raw return, is the same for all three share classes of the same fund.

I plotted

(1-l)*(1-e)^y

for your three funds. This represents the proportion of your money retained after fees. Hence, you want this number to be as high as possible.

Their fees will become equal at the end of year 8. So if you expect to stay at this company for less than eight years, you should use class C shares, and just rollover your 401k to an IRA at a place such as Vanguard where you can invest in low cost index funds.

If you expect to stay at this company for more than eight years, you should use class A shares.