Some 401(k) providers do offer index funds to smaller plans, but they typically charge a significant markup. One major insurance company is offering an S&P 500 index fund for 1.68% annually, when the actual cost is just 0.05%. That’s a 3,260% markup! Think of it this way: your friend buys a Honda Accord for the regular retail price of $22,000. But you’re forced to pay a 3,260% markup. Your cost for the exact same car: $717,200! Welcome to the world of high finance.
