Your 401(k) fund lineup at work may not stack up with the star-studded roster of the World Series champion Los Angeles Dodgers. And some of your funds may not hug market curves like a well-tuned Ferrari. In fact, your 401(k) plan is more likely than not to include overpriced and underperforming funds that could crimp the growth of your retirement nest egg, according to a recent report from Abernathy Daley 401k Consultants.
The analysis of 58,300 U.S. 401(k) plans from 2015 to 2025 found that nearly all (more than 99%) offer at least one overpriced and underperforming fund to plan participants over a period of three, five, and 10 years. And more than 94% contain at least three such funds. Over 85% include at least five such funds. The study notes that this is the case despite there being “cheaper, higher-performing alternatives.”
