John Bogle, founder of the Vanguard Group, not long ago explained the unavoidable mathematical reason why passive wins over active in retirement investing: You keep more of your own money invested and it compounds in your favor — not Wall Street's.

Fees paid to active managers end up equaling a huge amount of lost return, up to 80 percent of your gains over a lifetime, Bogle said. Don't believe it? You ignore such "humble arithmetic" at great risk.

Bogle spoke at length in an interview with Bloomberg News, predicting future pension returns of 5 percent before fees, not the 8 percent many assume. The return on bonds is 3 percent and the return on stocks, dividends included, is around 7 percent, Bogle said.

"We aren't going to get 8 percent a year in the next eight to 10 years," he said.

As Bogle explains, you dramatically cut Wall Street's take by using index funds. About a third of investors do so now, and that number is likely to rise over time as people realize how awful a deal active management is for retirement savers.

The reason is compounding: Invest a dollar in the markets and you stand a chance to earn, charitably, 7 percent on your money. But the manager is taking 2 percent of your total plan balance of $1.07.

So while you might make 7 cents on the dollar, the adviser is sucking in a bit more than 2.1 cents. In reality, that 2.1 cents is more than 30 percent of your one-year gain of 7 cents.

That giant sucking sound continues as your balance grows. Imagine instead of $1 you have $100,000 in your IRA in your 40s. You should be well on your way to retirement with that kind of balance, assuming you have a decade or two of earning years left.

Yet the active manager is still charging 2 percent. If you do earn a nice 7 percent on your pot, you pull in $7,000. Yet you're giving $2,140 to the manager. That's right, you are still losing nearly a third of your money to Wall Street.

All along the way, it must be assumed, the manager is earning a compounding return on your money, money that he or she keeps and will never share with you.

As that money compounds outside of your plan it overwhelms your results. Over the long haul the amount of your potential return lost to Wall Street is more like 65 percent and rapidly heading higher.

In short, every dollar you give away to active managers is gone forever and compounding for someone else. Retiring with more means you have to plug that gap by lowering fees, as soon as possible and permanently.