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KAI RYSSDAL: Putting it in an IPO is probably the worst thing you can do with your retirement money. Just stick it in a 401k and you’ll be fine. That’s what they say, anyway. But it turns out those self managed retirement plans don’t do quite as well as the old defined benefit pension plans. You know. The ones that are disappearing? Here’s Marketplace’s Hillary Wicai.

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HILLARY WICAI: A new report from the Center for Retirement Research at Boston College says 401k plans earned on average about one percentage point less each year than defined benefit pension plans. That 1 percent less per year means the pot at the end of your retirement rainbow could be about 20 percent smaller than if you’d had a traditional pension. Alicia Munell co-wrote the study. She says, plain and simple, individual investors aren’t as good as professional money managers. For starters, they don’t diversify enough.

ALICIA MUNELL:“It’s very hard especially when you have funds that have both stocks and bonds in it to figure out exactly what you have.”

But Dallas Salisbury at the Employee Benefit Research Institute says diversification doesn’t have to be so hard. He says consider a life-cycle fund. They have managers working to get the ratio of stocks to bonds in sync with how much risk you should be taking based on your age. For example, say you plan to retire in 2030 . . .

DALLAS SALISBURY:“So I’m going to pick the 2030 fund. For the next couple of decades it just automatically adjusts itself over time as you get older. So you don’t have to pay attention going forward.”

But today’s study says 401k investors have another thing working against them: fees. John Rother is the policy director at AARP. He says every fund charges fees and that means less for you.

JOHN ROTHER:“And these can make a big difference because if you had a 4 percent gain but you’ve got fees amounting to 1.5 points, than you’re only left with 2.5.”

And that may not add up to your sunset cruise.

In Washington, I’m Hillary Wicai for Marketplace.