Money Guy Show Your 401(k) Might Be Costing You Thousands
Feb 4, 2026
A deep dive into how some 401(k) funds share revenue with plan administrators and why that can inflate your costs. Clear examples compare revenue-sharing S&P trackers to ultra-low-cost index alternatives. Practical steps for advocating better plan options, navigating rollovers and Roth strategies, and simple rules for lump-sum investing and emergency tradeoffs.
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Hidden Revenue Sharing Raises 401(k) Costs
- Over half of large 401(k) plans include funds that share revenue with the plan administrator, creating hidden costs.
- Proprietary plan-affiliated funds often cost more and may underperform lower-cost alternatives.
Choose The Lowest-Cost Index Equivalent
- Compare internal expense ratios and choose the lowest-cost version of the same index exposure.
- Avoid closet index active funds that charge much higher fees for similar returns.
Be An Advocate For Better Plan Options
- Ask your HR or plan fiduciaries for low-cost index options and safe-harbor structures.
- Advocate tactfully and show employers how better options benefit both employees and plan sponsors.