401(k) Mistakes That Could Cost You Thousands

Don't make these mistakes.

401(k) plans are a common way to save for retirement, but simple mistakes may impact long-term growth. Here are a few key considerations when managing a retirement account.

Not Contributing Enough:
Employer-sponsored 401(k) plans often include matching contributions. Failing to contribute enough to receive the full match is essentially leaving money on the table.

Ignoring Investment Allocation:
Many 401(k) plans offer a range of investment options. Reviewing asset allocation periodically may help ensure that the portfolio aligns with risk tolerance and retirement goals.

Withdrawing Too Early:
Early withdrawals from a 401(k) before age 59½ may be subject to penalties and taxes. While exceptions exist, it’s important to understand the financial impact of early distributions.

Overlooking Required Minimum Distributions (RMDs):
For retirees, failing to take required withdrawals after age 73 may result in penalties. Reviewing distribution strategies may help manage tax implications in retirement.

401(k) plans are just one piece of a broader retirement strategy. Reviewing contributions, investment choices, and withdrawal plans regularly may help align with long-term financial goals.