In the old days, no one factored mutual fund fees when it came to 401(k) fees. Thankfully, fee disclosure changed that.

401(k) plan participants now incur far lower fees for holding mutual funds over, according to a study from the Investment Company Institute.

The research shows that from 2000 to 2023, the average equity mutual fund expense ratio paid by 401(k) investors dropped by 60%. The average bond mutual fund expense ratio has dropped by 63%. I’m sure much of the change is the increased use of low cost, index funds.

The expense ratios of target date mutual funds have fallen steadily since 2008. The average expense ratio of target date mutual funds dropped 55% from 2008 to 2023.