The Simple Mistake That Could Sabotage Your 401(k) in 2026

By Dana George – Feb 23, 2026 at 9:22AM ESTKey Points401(k) account fees can reach more than 2%.Fees may vary by plan administrator.You have the right to negotiate with your employer or plan provider for lower fees.These 10 Stocks Could Mint the Next Wave of Millionaires ›There's no reason to allow fees to eat into the money you've worked so hard to save.My husband and I have experienced a few significant changes recently. Not only has he decided to semi-retire and start a consulting business, but he's also taken over some of the financial tasks I've previously handled. A couple of weeks ago, he decided he would transfer the money from his employer-sponsored 401(k) plan to an IRA. His former employer offered a 6% matching plan on his contributions, a deal too good to pass up. However, it may have been a mistake to max out that 401(k) account because plan fees were higher than expected. I only tell you this because there's a lesson in it. Image source: Getty Images. A lesson that stings (quite) a bit Years ago, when my husband went to work for his employer, he thought I combed through the paperwork to find fees because I'm the household money geek. I thought he took care of the task because the account was in his name. Yes, we were busy moving from another state, but we both should have sat down and determined if the fees were fair. It was a ridiculous mix-up. If you haven't already, I recommend checking the fees on all your investment accounts, both private and employer-sponsored. Every dollar you pay in fees is a dollar that can't grow over time or benefit you in retirement. What high fees do to your savings Let's say you're under 50 and contribute $24,500 annually to your 401(k), maxing out the account. If you're paying 1.5% in total annual fees, that means you're losing $367.50 each year. But what's worse is that you're also losing out on any gains you may have earned on that money. Most investment accounts have fees that cover everything from account maintenance to trading commissions. But let's imagine the fee is 0.5% instead of 1.5%. If that were the case, you'd pay $122.50 annually instead of $367.50. That's a savings of $245, money that could have remained in your account. If that $245 were in your account each year, earning an average return of 7%, it would be worth $15,499 in 25 years (even more with company matching). That's not a fortune, but it's sure enough to help cover healthcare costs in retirement or take a nice trip somewhere you've always wanted to visit. How much should you pay? Fees of 1% to 1.5% signal high costs, although the average fee on retirement accounts ranges from 0.5% to more than 2%. To prevent fees from shrinking your nest egg, aim to pay 0.5% or less. If you're investing for retirement on your own, it's easy enough to shop around for a brokerage with low fees. However, it may be a little trickier if you're investing through an employer-sponsored plan. It doesn't have to be. Whether it's with your employer or plan provider, you have the right to negotiate high 401(k) fees. Ask about ways to lower the expense. They may be able to direct you toward funds with lower costs. If you can't get anywhere with your employer or plan provider, you have the option of contributing only the amount the company matches to its 401(k) and also contributing to an outside account with lower fees. For example, an individual retirement account (IRA) generally offers lower investment fees and more low-cost fund options. Don't make the same mistake we did. Be sure to read through the fine print to learn how much you're paying, and don't assume that a spouse or partner took care of the task.Read NextFeb 23, 2026 •By Katie BrockmanRetirees: This Is the Average Social Security Benefit at Ages 62, 67, and 70Feb 23, 2026 •By Selena MaranjianWhat Kind of Retirement Can a $250,000 Nest Egg Buy You?Feb 23, 2026 •By Maurie BackmanWhy the 4% Rule Could Fail Your Retirement -- and What to Do InsteadFeb 23, 2026 •By Christy BieberMany Retirees Don't See This Unfortunate Social Security Surprise ComingFeb 23, 2026 •By Maurie Backman3 Steps to Take to Collect the Max Monthly Social Security Check in RetirementFeb 22, 2026 •By Maurie BackmanWhy I'm Adopting a New Savings Strategy After Years of Maxing Out My 401(k)About the AuthorDana George is a contributing retirement and Social Security expert at The Motley Fool. Previously, Dana spent five years writing for Motley Fool Money and 20 years as a newspaper reporter. She is also the author of four published novels. She holds a bachelor’s degree in business management from Spring Arbor University. .TMFByGeorge