Pure Benchmarks · Workplace Retirement
How Do You Know If Your 401k Is Doing Well?
A 401k statement reports a balance and a return and gives you nothing to measure either against. The fund menu inside a workplace plan is chosen by your employer, the default option is usually a target date fund, and the plan itself never shows how your allocation performed relative to other investors carrying the same kind of risk. Pure Benchmarks connects workplace retirement accounts through a read-only secure connection and sorts them into the same nine standardized risk categories as every other portfolio, from 100 percent equity to 90 percent fixed income, then ranks yours against thousands of verified investor portfolios in that category. DALBAR has spent 40 years demonstrating that results depend more on investor behavior than on fund performance, and a plan statement is structurally unable to show you either one.
What a 401k statement does not tell you
It tells you the balance, the contributions, and the period return. It does not tell you whether that return was strong for the risk you carried, how it compares to other investors in the same allocation, or what your own past fund changes cost or gained.
Why a target date fund is not a benchmark
A target date fund is a product, not a comparison. Measuring your account against the fund you are already invested in explains nothing, and measuring it against the S&P 500 compares a diversified glide path to an all-equity index it was never built to track.
How a workplace account gets categorized and ranked
Holdings are read from the plan through a read-only secure connection and priced, the resulting allocation places the account into one of nine standardized risk categories, and performance is ranked against the verified peer set in that category. The same standard applies to a 401k, a 403b, a 457b, and an IRA.
What to look at first when the ranking is low
Hetty identifies the composition differences between your account and the accounts ranked ahead of you in the same category, and the Decision Benchmark prices every fund change already in your history against the peer set, so a low ranking comes with the reason attached.
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See Your Free Benchmark ReportFrequently asked questions
How do I know if my 401k is doing well?
Compare it to real investors carrying the same risk. Pure Benchmarks connects workplace retirement accounts read-only, sorts them into one of nine standardized risk categories, and ranks the account against thousands of verified investor portfolios in that category.
How does my 401k compare to other investors?
Pure Benchmarks reports your rank inside your risk category against the verified peer set, using anonymized performance data from real connected accounts rather than survey averages.
Is my 401k invested correctly?
Pure Benchmarks does not recommend fund selections. It shows which of the nine standardized risk categories your account falls into, how it ranks against real investors in that category, and the composition differences between your account and the accounts ranked ahead of it.
What is a good 401k return rate?
A good return is one that beats comparable investors carrying the same risk over the same period. The same percentage can be strong in a conservative category and below average in an aggressive one, which is why the category comes first.
Can I benchmark my 401k against real investors?
Yes. Workplace retirement accounts are ranked in the same Community Nests peer set as every other connected portfolio, held to the same nine standardized risk categories.
Keep exploring
- Am I On Track for Retirement?
- Scared You Won't Have Enough for Retirement?
- How Do You Know If Your Portfolio Is Doing Well?
- Compare Your Portfolio to Real Investors, Not an Index
- How Do You Know If Your Portfolio Changes Worked?
- How Do You Know If You Are Making Good Investment Decisions?
New here? Read the portfolio benchmarking FAQ or the Pure Benchmarks blog.
This page is an information baseline for comparison only. It is not investment advice and not a recommendation to buy, sell, replace, or transfer any specific asset, account, or firm. Past performance does not guarantee future results. All figures shown are illustrative.