Yahoo.com just posted this great article regarding 401(k) and the mistakes people make with it. Here is some information they posted. “The purpose of a 401(k) is to provide meaningful retirement income to plan participanta during his or her retirement. Most plans fail to meet this objective due to mistakes by the participants and plan sponsors. This applies to both large and small companies.”
Here are some mistakes participants make with their 401(k):
- Not participating in the plan at all.
- Failing to contribute adequate percentages to get the company match.
- Not understanding how much needs to be contributed to have the desired retirement income.
- Not understanding the level of risk in the investments selected.
- Taking too much risk or too little risk with the investments.
- Not understanding the costs of the 401(k).
- Putting too much into company stock.
- Borrowing from the 401(k).
- Cashing out the plan when changing jobs.