Findings from a recent survey of consumers and their 401k plans present a classic good news/bad news scenario.

The good news? The survey found 62% of Americans are contributing more into their 401k accounts as a result of the COVID-19 pandemic. The bad news? Nearly 75% have absolutely no idea what they pay in 401k plan fees.

According to the survey commissioned by investment management firm Rebalance, three-quarters Americans either underestimate the amount that they pay each year in fees to manage their retirement accounts, or simply don’t know how much they are paying in fees.

Over half of Americans surveyed (57%) falsely believe that they pay either no fees, or very low fees, to maintain their retirement accounts. In addition, nearly one-quarter don’t even know how much they pay in fees.

“As we have heard from our small business owner clients for some time now—and these survey results show—there is a worrisome trend in the financial services industry of investment professionals charging outsized fees,” said Scott Puritz, Managing Director of Rebalance. “Unfortunately, many hard-working Americans are not seeing the expected returns on their investments due to high fees associated with their 401k retirement savings.”

In actuality, everyone with a retirement account, such as a 401k or IRA, pays fees. According to the 21^st edition of the 401k Averages Book, the average employee working for a small business pays 2.22% per year in plan costs.

Last summer, Rebalance launched Better K, a 401k product designed to take the firm’s sophisticated, personalized approach to wealth management and apply it to retirement planning for small business owners and their employees. Because Rebalance says small businesses often get punished when it comes to fees associated with traditional 401k plans, a stated goal of Better K is to reduce annual 401k fees by up to 50%.

More survey findings

A lack of knowledge about how their money is being invested within their retirement account was another finding of the survey, with 51% admitting they were unsure of the breakdown of their investments between stocks and bonds.

The survey also found Americans are feeling anxious about their ability to afford a comfortable retirement. If they were able to go back in time, 84% said they would want to learn more about investing earlier in life, while 89% would want to invest more in retirement accounts earlier in life.

Back to the good news: Survey findings indicate that COVID-19 has had an effect on retirement savings, as 66% of respondents said they have changed their approach to retirement investing as a result of COVID-19, with 62% saving more for retirement as a result.

The online survey of 1,016 U.S. adults, age 45-75 and working full time, was conducted for Rebalance by SurveyMonkey between February 3-6, 2021.

Investment management firm Rebalance, headquartered in Palo Alto, Calif., and Bethesda, Md., currently manages more than 600 clients with over $1 billion in financial assets.