Should High-Net-Worth Investors Shun 401(k)s?

Darrell Preston and Gary Matsumoto of Bloomberg News look at the investment drag created by high 401(k) fees.

Reportedly, total expenses for participants may run to 3.5 or even 4%. With inflation lately running around 4%, a plan participant would have to achieve an investment return of close to 8% simply to preserve the real value of the contributions he or she makes to the plan. Chances of real investment growth would be slim.

Are more high-net-worth investors limiting their 401(k) contributions to the minimum necessary to obtain the employer's match?

Are more investment advisers suggesting that their clients follow this course?

For more on 401(k) fees, see this Marketplace interview with Matthew Hutcheson.