A typical 401(k) statement includes an account balance, total contributions, and a summary of investment performance.
Far less visible, however, is a clear accounting of the fees charged over the same period, leaving many investors without an easy way to determine how much those costs have reduced their savings.
That missing number could be the most expensive oversight in your retirement plan, and the math behind it is severe.
A survey of 500 respondents by automated rollover firm Capitalize found that 71% of 401(k) holders could not identify the total annual costs their plans charge.
Nearly half of those surveyed estimated that they pay less than 0.5% of total assets in fees. Only about 10% of plans across the country charge fees below 0.4%, creating a wide gap between assumption and reality, the firm found.
Many plans charge more than participants assume, and the compounding effect grows with each year those costs go unnoticed, according to Capitalize’s survey findings.
How a 1% fee difference can erase 28% of your 401(k) balance
The U.S. Department of Labor spells out the math in its published guidance on 401(k) plan fees with a straightforward example.
A worker with $25,000 saved and 35 years until retirement who earns 7% average annual returns would accumulate $227,000 under a 0.5% fee.
Raise the fee to 1.5%, and that same worker retires with only $163,000, a 28% reduction driven entirely by the higher annual cost.
No additional contributions are factored into the Department of Labor’s scenario, which means the entire $64,000 gap comes from compounding fees alone.
Dr. Steven Crane, Founder of Financial Legacy Builders, told Wealthtender that most workers seriously underestimate how a small fee difference compounds into a large retirement loss over time.
Many people underestimate how much fees matter over time because they look small on paper.
The damage compounds most aggressively during the final working years, when account balances are at their peak, and each fee dollar costs more.
What most 401(k) holders incorrectly assume about plan costs
About 41% of American workers are not even aware that they pay fees on their 401(k) plans, a 2026 PensionBee study found.
The confusion persists even though federal rules require plan sponsors to deliver annual fee disclosure notices to every enrolled participant.
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