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Investing Specialists

Is a Subpar 401(k) Worth Investing In?

Balancing extra costs, weak investment options against tax considerations.

In recent years, 401(k) plans have come in for some heat. A 2013 PBS Frontline documentary painted a grim picture of Americans' retirement preparedness and took 401(k) plans to task for being too costly and failing to offer simple but effective index funds. Helaine Olen's book Pound Foolish: Exposing the Dark Side of the Personal Finance Industry is similarly critical.

No doubt about it, many 401(k) plans--especially those offered by smaller employers--are not serving savers well. Their administrative costs are often too high, employer matching contributions can be lackluster, and investment lineups can be full of costly also-rans.