A. How bad the 401(k) system is? To begin with, barely half of the middle-income earners have 401(k), with their median balance in 2012 just $23,000. Not surprisingly, 401(k) savings are clustered among hte ranks of the affluent, with 72% of total savings held by the top 20% income group.
If you work for a small or middle company, chances are you don't know how greedily the 401(k) admin fee is, with not much size to spread the cost, the average fee is close to 1% for plans with less than $50M in assets.
Worse, the fees are not always obvious. Many retirement plans invest in so-called R shares, but they are not all created equal. Look for higher numbers attached to the R, for example, R4 shares rather than R1, because the lower the number, the higher the fees. If it's an R1, R2, or R3, you get the higher fees. An 1% difference in fees between share classes can add up over a lifetime to $200,000 less in savings at retirement.