Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

The Top 12 401(k) Mistakes to Avoid

edited January 23 in Fund Discussions

The Top 12 401(k) Mistakes to Avoid
An employer-sponsored 401(k) account can be a wonderful thing, helping you amass hundreds of thousands of dollars for retirement. Don't make any of these mistakes, though, or they could cost you -- a lot.

Most people can't sock away $26,000 each year, but the table below shows how much you might amass over time investing various sums regularly and earning an average annual return of 8%:

Years of 8% Annual Growth

Balance if Investing $10,000/Year

Balance if Investing $15,000/Year

Balance if Investing $20,000/Year

5 years




10 years




15 years




20 years




25 years




30 years




401(k) mistakes that can cost you a lot
It's clear that you'll need to be diligent if you want to build wealth with your 401(k) account. You'll also want to avoid common pitfalls. Here are 12 common 401(k) mistakes that could cost you a lot, followed by a closer look at each:

Not participating in your 401(k) plan
Not contributing enough to your 401(k)
Not increasing your 401(k) contributions regularly
Not contributing enough to get the full employer 401(k) match
Loading up on too much company stock
Staying with your 401(k) plan's default investment choices
Picking the wrong mutual funds and investments
Ignoring fees in your 401(k)
Not considering the Roth 401(k)
Ignoring important 401(k) rules
Cashing out or borrowing from your 401(k)
Not appreciating the downsides of 401(k)s


  • I don't think that all 12 mistakes are mistakes and don't think most on this site will either.Of these the least likely to be a mistake is # six as the default in most plans is an age appropriate target funds. I keep 10% of my investments in an age appropriate target fund asa control if that investment grows or shrinks asa % of my account I review my investments to see if I am doing something wrong
  • @jerry sounds like a good, practical metric to use.
Sign In or Register to comment.