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How to Compare Your 401(k)

A 401(k) plan is a popular way to save for retirement, but each employer decides what to offer with their own plans. Different 401(k) plans may have different fees, matching contribution limits, and investment options.

To determine if your 401(k) is competitive, you can compare its terms and offers with those of other 401(k). To do that, you can use a website like BrightScope or Morningstar, which provides ratings for individual 401(k) plans and specific investment options.

In this article, we’ll show you how to compare your 401(k) to others and what factors you should check to evaluate your plan.

  • Bloomberg, BrightScope and Morningstar have online tools that can help you compare your 401(k) to others.
  • Compare your plan fees, options, investment quality and employer matching.
  • If your plan is more expensive or more limited than some others, contact your plan administrator.
  • If you don’t have a manager willing to make your plan more competitive, consider diverting some of your retirement investments to other accounts.

How to Compare 401(k) Plans

You can compare your 401(k) plan with others at different levels. For a quick assessment, online tools like the one offered by Bloomberg allow you to check how your plan compares to the average plan.

If you want to do a more in-depth comparison, you’ll need to gather some key information about your project. Your Summary Plan Description (SPD) and Annual Report (Form 5500) can provide important information. If you do not receive this report automatically, you can request it from your company.

With this information, you can conduct a review of administrative costs, funding options and their costs, and employer matching contributions. You will also learn about additional features such as the ability to make post-tax Roth contributions.

You can compare these options and costs against other 401(k) plans offered in your industry. There are two major companies that provide this information: BrightScope and Morningstar. You can use any website to access funds information and see their rating.

When comparing your 401(k) to others, you should look at four key criteria: matching contributions, fees, options and investment quality. Here are these criteria in more detail:

Matching offers

Not all employers offer matching contributions, but they can be an important benefit of your 401(k) plan. According to the Vanguard study the average matching contribution limit is 4.5% of your salary and the average matching contribution limit is 4.0%.

You should also refer to the vesting schedule for any matching contributions. The vesting schedule is how long you have to stay with the company before you have rights to the contributions.

Financial advisors recommend contributing up to the employer match to avoid leaving “free money on the table.” If your plan doesn’t offer the investment options you want, you can invest money beyond your employer’s matching limit in another retirement plan, such as an IRA.


Fees can vary significantly among 401(k) plans, and they can affect how quickly you save for retirement. A difference of just 0.5% in plan fees can make a significant difference in how much money you save for retirement.

Plans may charge administrative fees in different ways, so it can be difficult to compare them. However, a good start is to look at your Form 5500. On this form, you will see your fee listed as a dollar amount. You need to divide that figure by the total assets in the plan to get your expense ratio.

The average 401(k) plan has an expense ratio of about 1%. and the 401(k) Average Book provide other comparative information on 401(k) plan costs. If your plan is more expensive than average, consider asking your employer about it.


Another important aspect of your 401(k) plan is how much choice it gives you. Employers choose which investments to offer in their 401(k) plans and are responsible for offering “prudent” options to plan participants. Hence, they limit your investment options.

However, you can expect some basic minimum options for your 401(k). You should have access to well-diversified US stock, foreign-stock and core bond funds. A 401(k) should also offer a range of target-date funds. Most employers won’t provide access to exotic, volatile investments for your 401(k), but it’s fair to expect a good mix of stock and bond funds.

Quality of investment

You should also assess the quality of the investments available to you. You can use Morningstar’s rating system to see if the funds you can buy for your 401(k) are high quality, as indicated by a Morningstar analyst “gold” rating.

If you find that the funds are expensive or have performed poorly, you can ask your 401(k) plan administrator if they would consider adding more options.

Where can I find data on 401(k) plans?

BrightScope and Morningstar have extensive databases on funds and 401(k) plans. You can also use tools offered by Bloomberg that allow you to quickly assess how your plan stacks up against the average.

What is the best employer match for a 401(k)?

The average employer match for 401(k) accounts was 4.5% in 2020 and the median was 4.0%, according to a Vanguard study. Employer adjustments greater than this, such as a 5% or 6% adjustment, may be considered a “good” employer adjustment.

What is the average 401(k) expense ratio?

Understanding the expense ratio for your 401(k) plan can help you compare it to others. As of 2021, the average 401(k) plan has an expense ratio of about 1%. Plans with more participants have lower fees and vice versa.

The bottom line

Tools provided by Bloomberg, BrightScope and Morningstar can help you compare your 401(k) to those offered by other companies in your sector. You should compare your plan in four key areas: matching offers, charges, options and investment quality.

If you find that your plan is more expensive or more limited than some other plans, you can talk to your plan administrator. If they are not willing to make your plan more competitive, you may consider diverting some of your retirement investments to other instruments.

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