Avoid These 401k Mistakes

When it comes to your retirement, it is important to avoid making major mistakes. Most people have a 401k, usually through a company, and it is probable that you have some say in the direction of your retirement plan. Redeeming Riches has a great post featuring 4 common 401k mistakes to avoid:

1. Bad methods for choosing funds. These include picking what performed well last years, as well as picking your funds according to what your coworkers have done.
2. Lack of diversification. Make sure you are properly diversified so that your retirement plan isn’t utterly destroyed when on sector or asset class tanks.
3. Not knowing your risk tolerance. Understand how much financial and emotional risk you can handle. And realize that you won’t get big returns with more risk.
4. Not paying attention to the company match. If you have a company match, take full advantage. Do the max if you can. Be sure that you aren’t leaving money on the table.

In the end, it’s your retirement, and you need to take an active role in planning for retirement, and doing what is required to make it successful and prosperous.

Image source: Frizzychick via Flickr