If Your 401(k) Is Still in These Funds, You Could Be Losing Thousands in Retirement Savings

Core Insights - Understanding the investment structure of 401(k) plans is crucial, as many participants may unknowingly invest in costlier mutual funds [2][4] - A significant portion of 401(k) plans includes investment options that share revenue with plan administrators, which can lead to higher costs for participants [3][8] Research Findings - The study analyzed the 1,000 largest 401(k) plans from 2009 to 2013, revealing that many plans have investment options that create conflicts of interest for savers [3][6] - On average, a 401(k) plan offers about 22 different investment options from seven different companies, with 40% of these options affiliated with the plan's record-keeper [5] - Approximately 54% of plans included at least one investment fund that shared revenue with the record-keeper, and these funds were 60% more likely to be included in the plan [6][7] - Revenue-sharing funds often did not provide better returns or lower upfront fees compared to non-revenue-sharing funds, leading to potential financial losses for participants [7][8]