The 8 Best Retirement Plans of 2020

It's never too early to plan for your financial future

Updated November 20, 2019

Our editors independently research, test, and recommend the best products and services; you can learn more about our review process here. We may receive commissions on purchases made from our chosen links.

If you want to retire with the same standard of living in your golden years, it is important to studiously save for retirement. Consistently putting away at least 10% to 15% of your income every payday should put you on track to a great retirement.

The best type of retirement plan for a large number of Americans is the 401(k) plan. This type of retirement plan is named for its section of the IRS code that explains how it all works. Most importantly, you should understand your investment options, how your retirement plan influences your taxes, and how to get the biggest impact from every dollar of retirement savings.

Depending on your employer, you may or may not have access to this type of retirement plan. Many education workers rely on a 403(b) plan, which has similar rules. Public employees of government agencies typically have a 457 plan in addition to a pension. But 401(k) plans are the biggest and most common employer-sponsored retirement plan.

If you are a small business owner, an HR manager evaluating 401(k) providers, or an in-demand worker comparing multiple job offers, it helps to understand the criteria that make a retirement plan the best retirement plan.

When looking at 401(k) plans, try to find one that minimizes fees while maximizing investment choices across diverse, low-fee mutual funds and/or ETFs that align with your needs. For this reason, some of the biggest investment brokerages and mutual fund providers set the standard for the best retirement plans available today. And the difference between expensive plans and low-cost plans can easily lead to tens of thousands of dollars in your retirement, if not more. A recent study found the average fee is around 1% of assets, but high-quality plans charge significantly less.

It's also important to consider employer matching. This is up to your employer, not the plan provider, but it's an incredibly valuable piece of the total compensation puzzle and you'll want to keep it in mind. Many large employers match around 3% to 6% of an employees gross pay.

Now that you know more about what to look for in a 401(k) plan, which is very similar to a 403(b) or 457 plan for education and government workers respectively, here is a list of the best retirement plan providers you can choose today.

The 8 Best Retirement Plans of 2020

Fidelity: Best Overall
Vanguard: Best for Low-Fee Funds
Charles Schwab: Runner-Up, Best for Low-Fee Funds
ForUsAll: Best for Small Businesses
Merrill Edge: Best for Large Companies
TIAA: Best for Teachers
Betterment: Best Robo-Advisor
Human Interest: Best Online-Only

Best Overall: Fidelity

Fidelity is a longtime leader in the retirement investing industry. If you are lucky enough to have Fidelity as your 401(k) plan provider, you have access to a great lineup of mutual funds and an overall low-cost plan. Fidelity is a large provider with more than $2 trillion under management.

Fidelity made headlines twice recently for adding four no-fee mutual funds to its lineup. If you have these funds in your Fidelity retirement plan, you should jump at the chance to invest with no fund fees. Even if you don’t have access to those four, Fidelity is a leader in low-cost funds that should align well with your retirement goals.

Fidelity clearly puts retirement and long-term financial goals first, which makes it a great partner as you work toward your dream retirement.

Best for Low-Fee Funds: Vanguard

Vanguard is a mutual fund juggernaut with over $5 trillion in assets under management. The company is a top retirement plan provider with an average fund expense ratio of just 0.11%. That is a fraction of the industry average 0.62% fee, according to Vanguard.

For the largest mutual funds by assets under management, Vanguard holds position #2 through #7 on the top 10 list and 13 of the largest 25 funds overall. It is really tough to beat Vanguard when it comes to low fees for broad market funds.

Vanguard is the long-time leader in low-fee funds. It's also a trusted name in investment and a pioneer in the low-cost index fund investment model.

Runner-Up, Best for Low-Fee Funds: Charles Schwab

Schwab is another top retirement plan company with over $3 trillion total under management. Schwab gives Vanguard a run for its money when it comes to low-cost mutual funds and ETFs. In recent years, Schwab has cut its average expense ratio to a rock-bottom 0.03%.

The biggest retirement providers look very similar when it comes to fees and funds, but Schwab is a step ahead when it comes to the average index fund cost. Schwab is also a great bank and investment company, which makes it a good choice if you want to keep all of your dollars under one roof.

Best for Small Businesses: ForUsAll

ForUsAll is a retirement plan provider that is also a newcomer to the industry. But they came in with fresh ideas and aggressive pricing to undercut the typical small and midsize 401(k) provider with low-fee investment choices. Advisory fees range from 0.35% of assets to 0.20% based on the size of the employer’s plan.

For employers, ForUsAll is a bargain. Businesses pay just $200 per month for plans up to $250,000 in assets and no fees for larger plans. This friendly and low-cost provider is great for independent businesses that don’t want the costs or hassles of the giant providers. And employees will be thrilled with the low fees and risk-sensitive investment options.

Best for Large Companies: Merrill Edge

Merrill Edge is the discount brokerage brand of Merrill Lynch, and offers competitive retirement plans for companies of all sizes. For large plans, Merrill Lynch ranked #2 in customer satisfaction in a J.D. Power & Associates survey, just behind Charles Schwab.

Unlike the top three on this list, Merrill does not offer its own branded mutual funds and ETFs. Instead, you’ll most likely end up with funds with names like Fidelity, Vanguard, Schwab, Blackrock, or T. Rowe Price in your portfolio. Specific funds vary by employer.

Best for Teachers: TIAA

Formerly TIAA-CREF, this full-service finance company has its roots in education. TIAA scores well in customer satisfaction rankings and the majority of their mutual funds score 4 or 5 stars at Morningstar. TIAA is a low-cost investment provider beating out the cost of 81% of comparable investments, according to TIAA.

Unlike some retirement plan providers, TIAA takes a holistic view of your finances to help you get the best long-term results. TIAA recently branched out to add banking and other financial products to its lineup. You can expect to read about this plan provider more in the coming years.

Best Robo-Advisor: Betterment

Best known as the first big robo-advisor, Betterment expanded in 2016 to offer 401(k) plans under the banner Betterment for Business. Advisory fees are fixed at 0.25% and expense ratios average 0.10%. Employers pay $4 to $6 per employee per month depending on the size of the business. But low costs are not what makes Betterment unique.

Your investment selections at Betterment are made by computers. You don’t have to know anything about mutual funds to succeed. New employees fill out a short survey explaining investment goals and risk tolerance and Betterment takes care of the rest.

While you may be nervous to hand over your investment selections to a computer, Betterment and similar companies use complex algorithms built by investment experts. Your funds get allocated into one of a handful of portfolios that most closely aligns to your unique needs and goals when it comes to your retirement savings.

Best Online-Only: Human Interest

Silicon Valley startup Human Interest doesn’t look a lot like its New York counterparts, and it takes pride in working to disrupt an industry known for confusion and high fees. Just like online banks offer lower fees than traditional banks, Human Interest operates as an online retirement plan with very low costs.

Ideal for small businesses, Human Interest offers a mix of traditional mutual funds and target date funds from low-cost providers like Vanguard. Employers pay $120 per month + $4 per employee. Participants pay 0.50% per year to Human Interest and funds have an average 0.08% expense ratio. Human Interest makes 401(k) plans for small businesses cheap and easy.

Our Process

Our writers spent 3 hours researching the most popular retirement plans on the market. Before making their final recommendations, they considered 32 different plans overall, read over 60 user reviews (both positive and negative), and tested 3 of the plans themselves. All of this research adds up to recommendations you can trust.