High 401k Fees? Here's Exactly What to Do
Your employer's plan is expensive, but you're not powerless. A step-by-step guide to reducing costs and protecting your retirement.
Key Takeaways
- 1Always contribute enough to get employer match, even with high fees
- 2Switch to index fund options within your plan to reduce expense ratios
- 3Build a coalition and petition HR for better fund options
- 4Use IRA for savings beyond the employer match to control costs
- 5Document everything if you suspect fiduciary violations
- 6Consider Gold IRA rollover when leaving employer
Step 1: Document Every Fee You're Paying
Before you can fight fees, you need to know exactly what you're dealing with. Create a complete picture:
- Request the annual 404(a)(5) fee disclosure from HR
- List expense ratio for every fund in your plan
- Note any per-participant administrative fees
- Calculate your total weighted expense ratio based on your allocation
- Compare to benchmark: Good is under 0.5%, bad is over 1%
- Document revenue sharing arrangements
| Information to Gather | Where to Find It |
|---|---|
| Expense Ratios | Fund prospectus, plan website |
| Admin Fees | 404(a)(5) disclosure, quarterly statement |
| Service Fees | Plan document, HR benefits office |
| Revenue Sharing | 408(b)(2) service provider disclosure |
Step 2: Optimize Your Investments Within the Plan
Even in a bad plan, there are often better options hiding in plain sight:
- Find the lowest-cost index fund options (S&P 500, total market)
- Avoid target date funds—they often have the highest fees
- Check for "institutional" share classes with lower expenses
- Look for self-directed brokerage window (BrokerageLink, PCRA)
- Avoid company stock—concentration risk plus potential extra fees
Step 3: Petition HR for Better Options
Your employer has a fiduciary duty to monitor fees. Rally your coworkers and advocate for change:
- Document fee comparisons showing better alternatives exist
- Gather support from coworkers (there's power in numbers)
- Present data-driven case to HR or benefits committee
- Mention fiduciary responsibility and potential lawsuit risk
- Suggest specific low-cost alternatives (Vanguard, Fidelity index funds)
- If ignored, consider anonymous DOL complaint
Exploring your retirement options?
Our 60-second quiz matches you with the right account type
Step 4: Use IRA for Savings Beyond the Match
You're stuck with your 401k for the employer match, but you control everything else:
- Contribute just enough to get full employer match
- Max out a Roth IRA or Traditional IRA ($7,000 limit in 2025)
- If you can save more, consider taxable brokerage with low-cost funds
- Self-employed? Solo 401k or SEP IRA give you full control
- Consider Gold IRA for portfolio diversification
| Account Type | 2025 Limit | Fees You Control |
|---|---|---|
| Roth IRA | $7,000 ($8,000 if 50+) | 100% |
| Traditional IRA | $7,000 ($8,000 if 50+) | 100% |
| Gold IRA | Same as IRA | 100% |
| Taxable Brokerage | Unlimited | 100% |
| 401k | $23,500 ($31,000 if 50+) | Limited |
Step 5: Plan Your Exit Strategy
When you eventually leave your employer, you'll have full control. Be ready:
- Don't accept automatic rollover into high-fee default IRA
- Compare fees: new employer's plan vs Gold IRA vs traditional IRA
- Direct rollover (trustee-to-trustee) avoids taxes and penalties
- Consider partial rollovers—some to IRA, some to new 401k
- Use job change as opportunity to diversify into gold
- Keep records of all cost basis for Roth contributions
Don't Skip the Match
Even with 2% fees, an employer match of 3-6% is essentially free money. The match return exceeds the fee drag in most cases. Get the full match first, then worry about optimizing costs for additional savings.
Take Control with a Gold IRA
Tired of being at the mercy of your employer's high-fee plan? A Gold IRA rollover gives you complete control over your retirement assets and costs.
- You choose the custodian and know exactly what you pay
- No hidden expense ratios or revenue sharing
- Physical gold as a hedge against inflation and market volatility
- Direct rollover from 401k when you leave your job—no taxes or penalties
- Diversification beyond paper assets your employer selected
Frequently Asked Questions
1Is a 1% 401k fee considered high?
Yes, by modern standards 1% is high. Index funds are available for 0.03-0.10%, and even blended portfolios shouldn't exceed 0.5%. A 1% fee will cost you hundreds of thousands over a career.
2Can I move my 401k while still employed?
Usually not for the portion you contributed. Some plans allow "in-service withdrawals" after age 59½ or for employer match portions. Check your plan document or ask HR.
3What if HR ignores my fee complaints?
Document everything and escalate. If they're violating fiduciary duties, you can file a complaint with the Department of Labor. Mention that you're aware of fee lawsuits against other employers—this often gets attention.
Related Articles
Helpful Guides
Interactive Tools
Ready to Protect Your Retirement?
Join thousands of Americans who have secured their savings with physical gold. Augusta Precious Metals makes the process simple.