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401(k) Participants' Awareness and Understanding of Fees

401(k) plans are the primary way most Americans save for retirement.  But successfully using a 401(k) plan to prepare for retirement requires knowledge of investment opportunities, types of plans and their mix of investments, knowledge of risk, and awareness of the costs associated with maintaining a plan.

Despite the need for knowledge, seven in ten are not aware that they pay fees to their 401(k) plan provider to maintain their account.  When told of these fees, six in ten are not aware of the amount they pay in fees to maintain their account.   

Key findings include:

  • When plan participants were asked whether they pay fees for their 401(k) plan, seven in ten (71%) reported that they did not pay any fees while less than a quarter (23%) said that they do pay fees.  Less than one in ten (6%) stated that they did not know whether or not they pay any fees. 
  • 401(k) participants may not have a clear understanding that there are fees associated with their plans.  About three in five (62%) are unaware of how much they are paying in fees for their plans, and almost one-third (32%) report that they do not feel knowledgeable about the impact that fees could have on their retirement savings.  However, about four in five (81%) believe that the fees charged for investments are very important or somewhat important in decisions about their 401(k) investments.
  • While most plan participants (63%) say that have contributed money to their 401(k) plan, about one-fifth (22%) have withdrawn money or received payments from their 401(k) plan. 
  • Almost two-thirds (64%) stated that they prefer to make their own decisions about saving and investing.  Some respondents reveal that they have taken steps to learn more about their investments such as using the summary information or prospectuses about mutual funds or consulting with a personal financial advisor. 
  • When respondents were asked how confident they are about having enough money to live comfortably throughout their retirement years, almost three-quarters (74%) stated that they are very confident or somewhat confident.  Not surprising since most respondents (64%) report that they have tried to calculate how much money they will need to have saved by the time they decide to retire so that they may live comfortably in retirement.  However, when respondents were asked how knowledgeable they feel about the impact that fees could have on their total retirement savings, almost one-third (32%) said that they do not feel knowledgeable.


The survey was conducted from December 14 through December 30, 2010 by Woelfel Research, Inc. of Dunn Loring, VA, among an RDD sample of 803 U.S. residents ages 25 and over living in telephone households who were 401(k) plan participants.  Please contact Lona Choi-Allum at 202-434-6333 for more information.