Having a 401(k) plan is great, but it doesn’t help much if you don’t manage and monitor it.
Current Trends: Big 401(k) changes are coming in 2026—high earners must act now
Learn: 5 Smart Ways Retirees Can Make Up to $1,000 a Month from Home
Consider a wider range of investment strategies, and be aware of these common 401(k) issues and mistakes that wealthy people avoid.
Simply forgetting about an old 401(k) account is a real loss: It may not live up to its potential. With high fees and low returns, a forgotten 401(k) plan could drain $90,000 or more from your retirement savings as you enter your golden years, according to a recent analysis by PensionBee.
So, take some time to review old accounts from your previous job and you’ll already have an edge on your financial future.
Please note: I’m a financial expert—This is the #1 mistake Americans make with their 401(k) plans
If you just got a raise or are currently earning more, make sure you can increase your contributions to your 401(k) plan. Additionally, inconsistent contributions may slow growth when you go back to school or go on maternity leave, so remember to adjust accordingly when you have a better approach.
Whether for medical expenses, job loss, home purchase, or other reasons, withdrawing funds early from a 401(k) account will be taxed and prevent future growth from compounding. So avoid making early withdrawals your first choice during life changes and transitions before retirement.
The IRS details exceptions to the 10% surtax on early distributions.
Medical costs, inflation, caregiving needs, and more can cause Americans to underestimate their retirement needs. Many retirees stop working earlier than expected due to unforeseen challenges rather than positive circumstances, according to a Congressional Group survey.
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This article originally appeared on GOBankingRates.com: Why your 401(k) is leaving you behind while the rich double their savings
