7 401(k) Mistakes You’re Probably Making

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in new as a 401k owner i call frequently and ask many questions about fees and how to reduce i now have less then .5 % annual cost i contributed a total of 7,535 bucks but have over 11,000 in my vested account the 7535 includes my and company match i am however fearful of a government takeover or the company just saying one day ooops we're bankrupt your accounts frozen or gone so i only put in 6% to get full match that way if i lose it ill be ok ill be pissed but ok

kevin401k of NC 11:28PM April 29, 2013

Tony of Tx;
I did roughly the same as you did. Instead of pulling out and stopping all contributions, I bumped my savings up to 20%. As of today I have more money than I had in 2008 when it all melted away. Sure it includes my contributions, but if I had stopped, where would I be? For many I did something foolish, but I chose to go along with it and ride it out. I'll never GET BACK the losses, but I am seeing good returns so far. I am closer to having a liveable return when I start to withdraw, than I would have if I had just idled. I am fortunate to have a defined pension benefit to count on, but the 401k and it's proceeds is a bit more of a comfort. I can't imagine what I'd do if at age 80, if I found myself in need of more money. Can't imagine anyone hiring me. I have a strategy because I have delayed retirement. My mortgage will be finished in a couple of months but I intend to send those payments to an account as if I were still paying the mortgage. I have been living without them for 15 years or so, and hope to create an additional nest egg for myself. Retirement is about 5 to 7 years from now, so that 5 to 7 years of extra savings. I now grow my own food during the growing season, have stopped smoking ( huge expense in NYC), make my coffee each day instead of buying, have no cable ( cheaper on the internet, wasn't much to watch anyway) and with fashion going retro, I am now fashionble. Took out the sewing machine and brushed up on a few sewing techniques. Am using a slow-cooker to make lunches while I sleep ( that saves at least $ 40 a week) and am embracing more vegetarian meals, lucky for me I have a pop-up vegetable market. They show up with really cheap fruits and vegetables that I am not attempting to grow. Lost 10 lbs this year. Am not obese or even close to being overweight. I get to treat myself with a succulent steak or something forbidden. This is not braggging, but just saying how wonderful it is to be able to find ways to make my golden years that much sweeter. If I can I hope to plant an asparagus crop, seems like no matter where we are that is something that is expensive to partake of.
If I could I'd make my own oil for heating, that was just a surreal experience, just a few months and it exceeded ny property taxes for the year this year,. Have to buy solar panels as an investment. Got my caulk gun out as I am not looking forward to the a/c season.

athene of NY 6:59PM May 04, 2011

I must be one of the lucky ones. I lost 54% of my funds with the crash. So what did I do? Instead of stopping my contributions to my 401K and whining about what I lost, I bumped my investing from 6% to 20% of my pay for a year while the company I work for put in 8.25%. Yes money was tight I worked whatever overtime I could get and cut expenses wherever I could. I studied and I invested in emerging markets and saw a 84% return in 2009. My wifes was down 34% in 2008 and up 129% in 2009. I have only had one year out of the past 8 that my return was less than 15% and this year is up 17% so far. So if you work to much you have only yourself to blame. What could be more important than learning about how to invest. If you work 70 hours a week, I would bet you get some down time like lunch breaks. Buy a book and then another, invest an hour a week to learn about what you are doing with your money. Take control of your future and stop blaming others before you work yourself to death or try to retire on Social Security.

Tony of TX 10:17PM November 11, 2010

Take the time to know where YOUE MONEY is going,get involved,when retirement comes and you don't have enougt money you have no one to blame but yourself.

steve of CA 10:43AM June 21, 2010

I am glad to say that my experience with my employer 401k is much better than the postings I have read. With my company with the first 5% contributed the company matches 3% then they have a 4% defined contribution pension and a profit sharing of 0-6% depending on the companies profitability. Our funds are low cost, and we have about a dozen domestic and international funds to chose from. While the earth hasn't moved for me, I have managed to average 4% a year over the last decade invested compleatly in the stock market. The only strategies that I have used are dollar cost averaging and rebalancing. I have kept everything in the stock market because we have stuff outside of the 401k that is more conservative.

john of UT 1:31PM June 16, 2010

What sort of a cloud do you people live in? Corporate 401K offerings are the worst funds on the market. My major offerer counts the money I DEPOSIT as 'money earned'. I have been participating in this racket for seven years and the only money that is in there, is LESS than what I put in.
It's pure flatulence to be quoting people as being able to expect annual rates of 7% or higher, reality is, you will be really lucky to match the dismal showings of your local checking account. And we are to blame because we aren't able to market time better than the pros? Not retired yet, I have an actual JOB I have to spend time on. Please tell me where, in 70 hour work weeks, I have time to become a market specialist?
In seven years, my employers offerings have never included more than one option that didn't continually loose money even in a good market. Not the employers fault, it's what trash the mutual funds offer. (Did you ever try to find a TIX for these mutual funds in the 401Ks, mostly they don't have them) The employee match is the ONLY positive spot, and many companies ditched that in the recession. My current company had a 6% match when I hired in, only to watch it be immediately eliminated. They just put back 2%, and they are pretty much operating on industry standards.
Retirement ain't even a pipe dream.

J of CO 1:10PM June 14, 2010

I really never thought 401k through an employer was all that good a deal,especially when the employer didnt match your donation.I worked for 17 years for an employer that didnt match,but did " give " a profit sharing of 15 % of total income after 10 years employed,I opted out and bought ira cd s every year and it seamed to work out pretty good.Now I am almost ready to retire and I have quite a nest egg. Plus I never had to worry about ups and downs on my money.And I always new where it was and how to and when I could get to it.No I dont recomend letting someone else handle your money Ill say do it youself.

Bill Jones of IN 5:44PM June 05, 2010

1. many would be happy to say their return is 0% as they still have not recovered their losses.
2. do you really think putting under the mattress is the best way? how about some simple but methodical approach? for example: http://manage401k.blogspot.com/

Leon of CA 12:38AM May 31, 2010

the screwing continues by way of high fees that employees mostly know nothing about & are afraid to ask.just another scam of the middle class.

h of CT 10:32AM May 28, 2010

Contributing at all. Until the average worker has eliminated his personal debt he is only lining the pockets of those richer than himself rather than removing the yoke of servitude and slavery. No return on investment matches both the financial and personally empowering returns of keeping what you have earned and paying nothing for the use of another person’s money. It is impossible to grow wealth while servicing consumer debt.

Nathan of MO 9:25AM May 27, 2010