401k Fees: What the Average Plan Costs, Where to Find Yours, and What They Compound To (2026)

401k fees rarely appear as a line on your statement, yet the average large plan cost 0.85% of assets in 2022, and that cost compounds every single year.

401(k) fees are the costs of running a plan and its investments, deducted from participant accounts or paid by the employer. They fall into three groups: investment fees, plan administration fees, and individual service fees. In 2022, the average large 401(k) plan cost 0.85% of assets a year, while the average participant paid 0.52%.

By Craig Wear, CFP® | Last reviewed: October 14, 2026

This guide covers the whole 401(k) bill: what a typical plan costs, who pays, where fees are disclosed, and how a gap compounds. Picking funds by expense ratio is covered in how to choose 401(k) investments.

What are 401(k) fees?

401(k) fees are every charge that reduces your account for running the plan, managing its investments, or providing an optional service. The Department of Labor groups them into three categories, and each one is charged in a different way.

Investment fees come out of fund returns, so they never appear as a separate deduction. Administration fees pay for recordkeeping, accounting, legal, and trustee work. Individual service fees apply only when you use a feature, such as a loan.

Two investment-fee details trip people up. A fund marketed as “no-load” can still carry an ongoing 12b-1 fee, and a target-date fund that holds other funds can stack fees at both levels, according to the DOL’s fee booklet. For a broader primer on the account itself, see how a 401(k) works.

How much does the average 401(k) plan cost?

The average large 401(k) plan had a total plan cost of 0.85% of assets in 2022, but most participants paid less because they sit in bigger, cheaper plans. That is why three different “averages” exist, and each answers a different question.

The BrightScope/ICI 401(k) profile, built from audited Form 5500 filings, reports 0.85% when every plan counts equally, 0.52% when each participant counts equally, and 0.33% when each dollar counts equally. Plans with more than $1 billion in assets are under 2% of plans but hold about three-fifths of 401(k) assets, which pulls the participant and dollar averages down.

Spread matters as much as the average. In 2022, 10% of plans cost 0.31% or less and another 10% cost 1.45% or more; the median was 0.75%. Among plans under $1 million, the middle 80% ranged from 0.16% to 2.63%. One reason small plans cost more is tiny balances: in plans under $1 million with 100 or more participants, the average account held $1,928, so fixed recordkeeping costs weigh heavily.

A common misconception holds that 401(k) investors pay around 2% a year in fund costs. ICI’s data cut against it: the simple average equity mutual fund expense ratio was 1.10% in 2024, but 401(k) savers concentrate in cheaper funds, so their asset-weighted average was 0.26% (ICI, July 2025). Target-date mutual fund investors paid 0.29% on average in 2024, down from 0.67% in 2008.

Who pays 401(k) fees, the employer or the employee?

Employers and employees generally share 401(k) costs, and the employer decides the split. ICI’s research says exactly that, and the DOL notes that separately charged administrative costs are borne either by the employer or by plan assets.

When the plan pays, administrative costs land on participants in one of two ways. A pro rata allocation charges larger balances more, while a per capita allocation charges every account the same flat dollar amount. Many plans also pay recordkeeping through revenue sharing, where part of a fund’s expense ratio (12b-1 fees or sub-transfer agent fees, for example) is passed to the recordkeeper. Federal rules require the quarterly statement to say so when that happens.

The employer has its own disclosure track. Under 29 CFR 2550.408b-2(c), any “covered service provider” that reasonably expects $1,000 or more in direct or indirect compensation must disclose its services and pay to the responsible plan fiduciary. Participants do not receive these 408(b)(2) disclosures automatically. How sponsors hire and pay these firms is covered in our guide to the 401(k) third party administrator, and larger plans also pay for a 401(k) audit.

Where can you find the 401(k) fees you pay?

Your main source is the annual participant fee disclosure required by 29 CFR 2550.404a-5, backed by quarterly statements that list the dollars actually deducted. Together they show nearly the whole bill, if you know which line to read.

1. The annual fee disclosure. It must arrive before you can first direct investments and then at least once in any 14 month period. It lists each fund’s total annual operating expenses as a percentage and as a dollar amount per $1,000 invested, plus shareholder-type fees such as redemption fees.
2. The quarterly statement. It must show, at least once in any 3 month period, the dollar amount of administrative and individual fees actually charged to your account in the prior quarter. It does not include fund expense ratios, which are paid indirectly from returns.
3. The summary plan description. It explains how the plan allocates expenses among participants.
4. The Form 5500. The plan’s annual report shows aggregate administrative expenses. Anyone can search it for free on the DOL’s EFAST2 Form 5500 search, though it does not show expenses deducted from investment results.

The biggest blind spot is assuming the quarterly statement shows everything. The DOL booklet states plainly that this statement “does not include charges paid indirectly from your investments,” and for most participants those indirect fund costs are the largest share.

Worked example (hypothetical): your personal all-in cost. Suppose a participant has a $150,000 balance: $90,000 in an index fund with a 0.05% expense ratio ($45 a year) and $60,000 in a target-date fund at 0.40% ($240). The quarterly statements show a $25 recordkeeping fee each quarter ($100 a year). The all-in cost is $385, or about 0.26% of the balance. The same math on a fee disclosure’s “per $1,000” column is quicker: 0.85% equals $8.50 per $1,000 each year.

How much do 401(k) fees cost over 30 years?

A fee gap that looks small in one year can reduce a career balance by hundreds of thousands of dollars, because it is charged on a growing balance every year. In the DOL’s own example, a 1 percentage point gap shrinks a balance by 28% over 35 years.

The illustration below uses real fee levels from the BrightScope/ICI data rather than round numbers. It assumes, hypothetically, $24,500 contributed at the end of each year for 30 years (the 2026 employee deferral limit, per the IRS, held flat with no match or catch-up), a 6% annual return before fees, and the fee subtracted from that return. It is not a projection of any investment.

The DOL’s caution still applies: cheaper is not automatically better, so its booklet asks participants to compare net returns relative to risk and services, not fees alone. What a reasonable fund expense ratio looks like is covered in choosing 401(k) investments.

Which individual service fees can a 401(k) charge?

Individual service fees are charges that hit only the accounts of participants who use a particular feature, and they are disclosed in dollars on the quarterly statement. The federal disclosure rule lists the common ones.

Under 29 CFR 2550.404a-5(c)(3), examples include fees for processing plan loans or qualified domestic relations orders (used in divorce), fees for investment advice, brokerage window fees, commissions, front or back-end loads, redemption fees, transfer fees, and optional rider charges in annuity contracts. Plans must explain these in advance and report the dollars charged each quarter.

Because they are occasional, these fees are easy to miss; a participant weighing a loan can add them to the analysis in 401(k) loan vs withdrawal.

What can a participant do about high 401(k) fees?

A participant controls fund selection, can raise fee questions with the employer, and decides what to do with the account after leaving a job. Each lever works differently.

• Lower-cost options within the menu. Index funds held 44% of 401(k) assets in 2022, and more than 95% of plans over $10 million offered at least one (BrightScope/ICI).
• Share classes and collective investment trusts. Larger plans can use institutional share classes or CITs, which held 43% of large-plan assets in 2022. The DOL encourages participants to “let your employer know your preference.”
• The DOL’s 10 question checklist. It asks, among other things, who pays administrative costs and whether any options carry loads, 12b-1 fees, or surrender charges.
• The employer’s duty. ERISA requires fees to be “reasonable” in light of services, rather than setting a fixed cap, so the reasonableness of fees “must be determined in each case,” per the DOL.
• Rollover tradeoffs. At separation, an IRA can widen fund choice, but it can also lose institutional pricing, add an advisory fee, or change creditor protection. See disadvantages of rolling a 401(k) into an IRA and how to roll over a 401(k) to an IRA for the full comparison.

Advice fees deserve the same scrutiny, since how an adviser is paid can shape rollover recommendations; see fee-only compensation.

How do 401(k) fees interact with a Roth conversion strategy?

Fees cost more, in after-tax terms, on Roth dollars than on pre-tax dollars, which matters when a retiree is planning conversions. A fee taken from a traditional balance reduces money that would have been taxed on withdrawal; a fee taken from a Roth balance reduces money that qualified withdrawals would have delivered tax-free.

A hypothetical example: for someone expecting to withdraw in the 24% bracket (which tops out at $201,775 single or $403,550 married filing jointly in 2026), $1,000 of fees in a traditional 401(k) reduces after-tax spending power by roughly $760. The same $1,000 in a Roth account reduces it by the full $1,000.

That is one reason the all-in cost of the destination account belongs in conversion planning. Whether to convert inside the plan or after a rollover, and in what order, is covered in 401(k) to Roth conversion rules and which account to convert first. A financial professional can model fees, brackets, and timing together rather than one at a time.

Frequently asked questions

Methodology: Plan cost figures come from The BrightScope/ICI Defined Contribution Plan Profile: A Close Look at 401(k) Plans, 2022 (March 2025), which covers 59,012 audited plans with $5.5 trillion in assets, typically with 100 or more participants; smaller plans are not represented. Mutual fund expense ratios come from ICI Research Perspective Vol. 31, No. 5 (July 2025). Fee categories and the 35 year example come from the DOL booklet A Look at 401(k) Plan Fees; disclosure rules from the text of 29 CFR 2550.404a-5 and 2550.408b-2. The 30 year illustration is hypothetical (end-of-year contributions, constant return, no taxes). Because this is a financial topic, anonymous forum anecdotes and unsourced fee surveys were excluded.