Article

Fixing the Drain on Retirement Savings

Better disclosure about retirement fees will go a long way toward boosting retirement savings.

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Less than one in five American workers in private industry has access to defined benefit pension plans. As a result, most Americans’ quality of life during retirement depends on whether they have invested in retirement savings vehicles such as 401(k)s and Individual Retirement Accounts, or IRAs, and how their investments perform. The reality is, the corrosive effect of high fees in many of these retirement accounts forces many Americans to work years longer than necessary or than planned.

Clearer, more transparent information has helped inform consumers about a variety of decisions from choosing between appliances to choosing between dinner options. With 52 million Americans relying on 401(k) funds as part of their retirement savings and a similar number depending on IRAs, why not offer better labeling for retirement funds?

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Authors

Jennifer Erickson

Director, Competitiveness and Economic Growth

David Madland

Senior Fellow; Senior Adviser, American Worker Project