Why your 401(k) is probably not as good as you think

Americans who are happy with their 401(k) may be less satisfied once they grasp the hidden fees baked into the policy, Tom Zgainer, CEO of retirement plan provider America's Best 401K, said Tuesday.

"What you think you might have — inherently its foundation is good — at the end of the day is not," he told CNBC's "Squawk Box."

Hidden fees in 401(k) plans cost Americans more than $17 billion a year, according to White House estimates. That can reduce retirement savings by as much as 60 percent.

The Department of Labor implemented a rules in 2012 to improve the transparency of fees and expenses in retirement plans. The problem is disclosures are buried in 25 to 50 page documents, Zgainer said.

"Fees are hidden in plain sight. It's almost impossible for the average person to articulate how those numbers add up," he said.

America's Best 401K seeks to offer retirement plans with low fees through employers. Zgainer said employees are often handcuffed by well-intentioned employers due to the choice of plan providers they offer.

The firm also runs a website, showemethefees.com, that lets users compare their plan's fees to industry averages.

In addition to paying too much for fees, Americans are not saving enough, Zgainer said. Millennials in particular can expect to live 30 to 40 years past their active work life, he noted.

Americans should be saving 12 percent to 15 percent of their income, according to Zgainer. Those with a Roth 401(k), which are funded with after-tax cash, can likely save 8 percent or 9 percent, he added.

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