Retirement Retirement Planning

401(k) Plans With These 6 Features Are Outperforming by $50,000

These 401(k) plan features can seriously boost your retirement savings.

By Catherine Collins

Edited by Laura Hohenstein

Updated Dec. 17, 2025

There are many ways to boost your retirement savings. Most people know to increase their investment amounts or choose low-cost funds. However, few realize just how important the features inside a 401(k) plan can be.

That's why understanding what your 401(k) provides is a key step in your retirement planning journey. It's important to know exactly what you're paying for, what benefits your employer offers, and how much your fees will impact your investment growth over the course of your career.

Here are some of the best features employers can offer with a 401(k) plan. If your plan has these, you can use them to your advantage, earning as much as $50,000 more over the course of your investing journey.

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Automatic Enrollment

Without a doubt, automatic enrollment is one of the most important features of a 401(k) plan. A Vanguard report, How America Saves, showed that 61% of retirement plans offer automatic enrollment.

Imagine someone being a 25-year-old in their first job out of college. They're not well-versed in retirement planning, and it feels like it's a long way away. However, their employer automatically enrolls them in a 401(k) during onboarding, even choosing the funds for them. Contrast that with a different 25-year-old who joins another company that doesn't offer automatic enrollment. Because a 401(k) feels confusing and they don't want to look uneducated at their new job, they delay signing up for the plan for a few years, potentially losing thousands of dollars in future investment returns.

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Auto-escalation

Auto-escalation is a feature some 401(k) plans offer that automatically increases your contribution rate, typically once a year. Most people won't notice a 1% increase in their 401(k) contributions overall, and it's far less common for people to increase their contribution rate on their own.

For example, an employee in their 30s who might be balancing work and parenting responsibilities may not have time to log in to their 401(k) and manually increase their retirement contribution. However, if their plan has auto-escalation, it will slowly increase contributions on the employee's behalf. Even a 5% increase in contributions over five years could amount to tens of thousands of dollars by the time the employee retires at age 65.

Employer match

Employers that offer an employer match can help their employees save far more for retirement. An employer match is essentially free money, so plans with a match component can dramatically increase the total amount people can save and invest for retirement.

If you earn $60,000 per year, and your employer matches 100% of your contributions up to 4%, you could contribute $2,400, and your employer would match your contribution by adding $2,400 to your total. Employees who don't take advantage of an employer match or who don't invest up to the match limit are forfeiting thousands of dollars of compound growth over time.

Broad investment choices

Not all 401(k) plans are created equally. One of the most confusing parts of setting up a 401(k) is deciding which investment option to choose. Some 401(k) plans have high-fee products, and others feature low-cost funds.

Choosing a low-cost index fund with a 0.05% ratio instead of a higher-cost managed fund with a 0.75% ratio could add tens of thousands of dollars to a retirement portfolio, depending on how much you invest. While the difference in fees seems small when you're comparing one fund to another, it's actually significant when you think about investing long-term over your entire career.

Transparent fee disclosures

Some 401(k) plans have very clear fee disclosures. At the same time, others have fee information buried deep within pages of text. Employees can make better financial choices and earn more in the long run once they fully understand how much of their investments are going towards fees.

A 401(k) with transparent fees will have a clear, easy-to-understand disclosure sheet with examples of how much fees impact your investment gains.

Fast vesting options

When someone is fully vested in their company's 401(k) plan, it means they keep all employer-matched contributions, even if they change jobs. There are three types of vesting: immediate vesting, graded vesting, and cliff vesting. Graded or cliff vesting is when companies require employees to work for a specific number of years before being fully vested.

Immediate vesting is just as it sounds: employees get full ownership of employer matches right away. Companies that offer 401(k) plans with immediate vesting could help employees grow their retirement accounts much more if they end up leaving for another job.

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How to review your 401(k) plan details

If you want to learn more about your 401(k), the best next step is to ask your HR department for your 401(k) summary plan description (SPD). If you don't see fees listed in the SPD, you can also ask for a fee disclosure. Double-check how much you're contributing to your retirement plan and whether or not you're earning the full employer match. If you have any questions, don't be afraid to ask for clarification.

Bottom line

The features that your 401(k) plan offers can actually impact the amount of money you accumulate in your account. A recent Bank of America Workplace Benefits survey found that 35% of respondents wished they had taken full advantage of their 401(k) match. So, if you're able to, take the time today to review your plan features so you can retire comfortably without regrets.

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