8 Factors that Determine Your Final 401(k) Balance

Savings and investment choices aren’t the only things that influence the size of your next egg.

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Fees. 401(k) fees and expenses cut into investment returns. "If you're paying an extra 1 or 2 percent in fees in addition to investment costs, that's going to play a huge role in your overall investments over time," says Garcia. In extreme cases, fund expenses can even cancel out your growth. "If there are 3 percent fees, you could actually be going backwards," says Sarenski. "The higher the fees, the less growth you are going to have on your 401(k) plan money."

[See 6 Ways Employers Will Change 401(k)'s in 2010.]

Early withdrawals. 401(k) withdrawals before age 55 come with a 10 percent penalty in addition to income tax on the amount withdrawn. These early withdrawals can have a devastating effect on your final retirement account balance. For example, consider a 401(k) account holder born in 1970 who consistently saves 6 percent of pay annually from age 21 to age 65 and who gets a 3 percent employer match. If that person cashes out his or her balance once at age 35, it will result in $183,618 less in retirement than someone who didn't take any early withdrawals, according to Government Accountability Office calculations. To maintain the tax-deferred benefits of an old 401(k) account, leave it with an old employer, roll the balance over into an IRA, or transfer your savings to a new employer's 401(k).