The biggest reason for low balances is probably what they point out in a sentence buried in the middle of the article. Failure to contribute. Bottom line is someone putting in a reasonable ammt of money over their entire working career is only going to do so badly no matter what funds they chose.
However, most of the reasons for the low balance noted probably boil down to people making stupid decisions:
1 - The example they use is a 29 year old that has a 50/50 stock/bond allocation. Hopefully no 29 year old actually does this, it's a horrible allocation for that age group and kind of ridiculous to base a simulation on.
2 - Fees. I suppose there is nothing you can do about this you are stuck with what choices are in your plan. I will say, my plan offers a full 40 choices, many of which are specialty type funds with fees of 1% or more. I'm sure these exotic names entice tons of plan participants who allocate 5% chunks to 20 different high fee funds (and never looked at the fees), then wonder why their returns suck. Mine is 100% in the S&P index fund option which carries a pretty reasonable fee in the 0.10% range. So excessive fees can probably be largely avoided if you're not an idiot.
3 - 'Leakages'. They don't really elaborate on this. I'm going to guess it's yet again idiot moves like people withdrawing early or taking loans on their 401k. Enough said about that.
