Retirement Retirement Planning

Elizabeth Warren Says Workers Deserve Better Than Today’s 401(k)s

The fees, risks, and volatility can hurt.

By Catherine Collins

Edited by Kristy DeSmit

Updated Feb. 26, 2026

Add Us On Google

Senator Elizabeth Warren has been advocating for American workers for many years. She has taken steps to ensure that workers can rely on their 401(k) retirement plans. In the past, American workers had pensions, but the popularity of pensions has dramatically declined. In fact, very few employers offer them.

Now that more workers have 401(k) retirement plans, Warren wants to make sure they are aware of the potential drawbacks. Here are some of Warren's criticisms of current 401(k) plans and why she says workers deserve better.

Steal this billionaire wealth-building technique

The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.

A new company called Masterworks allows everyday investors to buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.

If you have at least $10k to invest, see what Masterworks has on offer. (Hurry, they often sell out!)

High fees

One of Warren's primary concerns with 401(k) plans is that many of them have high fees. Some of these fees include investment management fees such as expense ratio fees, administrative fees, record-keeping fees, advisory fees, and transaction fees.

Many workers aren't even aware that they pay these fees. However, paying them over a long period can dramatically reduce the amount of money people have in retirement.

Who really has the cheapest auto insurance in your area? Check your zip code here.

Lack of guaranteed income

Another criticism Warren has of 401(k)s is the lack of guaranteed income. Traditional pensions offered guaranteed income, including specific monthly payments for life. However, 401(k) plans do not offer this. American workers, instead, have to plan their own retirement, ensure they have enough money in their 401(k) accounts, choose investments, and develop a withdrawal strategy.

This lack of guaranteed income can make it stressful for American workers to know whether or not they have saved enough for retirement. Additionally, hiring a financial planner to help ensure they're making the best investment choices is an additional cost they'll have to pay if they want professional advice.

Market risk rests on workers

When more workers had pensions, the responsibility of retirement rested on companies and employers. Now, workers shoulder most of the market risks.

The stock market can be volatile, and if Americans are not informed about proper investment allocation and the amount needed for retirement, they can be at risk of not being able to retire. Warren does not believe that this burden should be placed solely on American workers.

Get a protection plan on all your appliances

Did you know if your air conditioner stops working, your homeowner’s insurance won’t cover it? Same with plumbing, electrical issues, appliances, and more.

Whether or not you’re a new homeowner, a home warranty from Choice Home Warranty could pick up the slack where insurance falls short and protect you against surprise expenses. If a covered system in your home breaks, you can call their hotline 24/7 to get it repaired.

For a limited time, you can get your first month free with a Single Payment home warranty plan.

Get a free quote

Concerns about volatile assets

President Donald Trump has recently proposed allowing alternative Investments into 401(k) plans. Alternative investments include assets like cryptocurrency.

Elizabeth Warren, along with other senators, has drafted a letter asking the SEC to explain how it will protect American workers if it begins allowing alternative assets in 401(k) retirement plans. Warren's concern is that American workers will purchase alternative assets without realizing how volatile they can be.

The call for investment protections

Because the Trump Administration is considering including these alternative assets in 401(k) plans, Warren has called for stronger investment protections for American workers. She has written several public letters and statements urging regulators to adopt stricter fiduciary standards and to protect American workers from large market swings.

Many employees purchase products within their 401(k) without understanding their fees or risks. Warren advocates stronger safeguards to prevent American workers from being caught off guard by plan fees.

The other side

Supporters of expanding 401(k) plans argue that disclosure rules already exist within 401(k) plans. Additionally, supporters of adding cryptocurrency and other assets to 401(k) plans argue that many stocks currently allowed in plans are also volatile.

Some people believe that American workers should have the right to choose what is best for them when it comes to selecting investments and managing their 401(k) plans. Additionally, those in favor of these changes say Americans deserve to have many different investment options to choose from when it comes to their own retirement plans.

Retirement News: Almost 80% of Americans fear a retirement age increase — here’s the real reason why

The importance of retirement security

Currently, 43% of working Americans have a 401(k) plan. Many of them rely on their 401(k) plans to have enough income to live on in retirement.

Although people are responsible for learning as much as they can about 401(k) plans, Warren says there should also be public policies to protect workers from buying products that may be expensive, heavy, have fees, or be more volatile than they realize. Unfortunately, many workers who retire end up going back to work because they need additional income. More safeguards could help prevent this.

Bottom line

Ultimately, Warren believes that all Americans should be able to enjoy a stress-free retirement. However, based on her letters, interviews, and statements over the past few years, she believes the current 401(k) retirement system could improve transparency. She frequently criticizes 401(k) plans for high fees, market volatility, and the lack of guaranteed income.

While debates over including new types of assets in 401(k)s are ongoing, Warren remains at the forefront, encouraging government offices to consider the well-being of Americans when making those decisions.

More from FinanceBuzz: