posted by Leah Gorham
By Liz Pulliam Weston
Not contributing at all is the biggest mistake people make, but there are others that can cost you substantially as well.
In many ways, the 401(k) picture looks bright.
Most folks who have access to a 401(k) take advantage of their workplace retirement plans. Average balances are up over the past few years. And workers seem to have finally gotten the message that company stock is not their best investment option.
But millions of workers are still blowing it every day when dealing with their retirement plans. Here are the seven biggest blunders you can make:
1. Not signing up
I've seen a few awful 401(k) plans in my time. One was run by a dentist who forced his employees to help him buy raw land. (That was their only investment option.) Another offered only high-cost, poorly performing variable annuities with surrender charges that lasted 16 years, meaning workers often had to forfeit a good chunk of their money if they left their jobs and wanted to roll over their accounts.
But such truly heinous plans are few. Most participants get a decent range of investment options (17 choices is typical), reasonable fees and a company match. About 98% of the large-company plans that Hewitt Associates surveyed contribute to employee plans, with two-thirds offering matches.
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