A pile of money that symbolizes high 401(k) fees piling up.

I've been warned that some companies' 401(k) plans have high fees. But how high is too high?

Look for and add up all the administrative fees, which are typically online and/or broken out as a line item on your 401(k) plan statement, together with investment management costs; these should be listed next to each fund option on your prospectus. "Generally, if your 401(k) plan's total costs are 1.5 percent or more, you're paying more than you should," says Penelope Wang, CR's deputy money editor.

More on Retirement Planning

If your employer's plan fees are higher than you'd like, you may be better off contributing some money to your 401(k) and then saving more outside of it. If you plan on staying with your employer long-term, save just enough to get your full employer matching contribution using the plan’s lowest-cost option (that’s free money, with many companies offering a 50 percent match up to 6 percent).

Then, if you're eligible, put additional savings into a diversified portfolio in a Roth IRA, which requires you to pay taxes now but not when you retire. Or opt for a traditional IRA and put in as much as you can up to the annual IRS limit (a total of $5,500 for 2018, or $6,000 for 2019; those age 50 and older can contribute an additional $1,000). Beyond that, you could put money in tax-efficient investments, such as a municipal bond fund.

If you intend to change jobs in a year or so, the fees are less of a problem— just remember to roll over your plan into a low-cost IRA or your new employer's 401(k) when you leave.

Editor's Note: This article also appeared in the February 2019 issue of Consumer Reports magazine.