These 3 Painfully Obvious Mistakes Are 401(k) Killers – Buffalo News

You should also inquire about your 401(k)’s vesting schedule if you haven’t been with the company long. This determines when you’re eligible to keep your employer-matched funds if you leave the company. Ideally, you can stick it out until you’re fully vested so you don’t lose any of your match.

2. Paying high investment fees

All investments charge fees, though not everyone realizes this, because the money comes directly out of your 401(k) each year. There’s no way to avoid fees entirely, but you can keep your costs down by choosing your investments carefully.

Most companies offer their employees a choice of various mutual funds, and these have expense ratios, or annual fees expressed as a percentage of your assets. If you’re paying a 1% expense ratio, that means you’re paying the mutual fund company 1% of all the money you have invested in the fund every year. That’s only $1 if you have $100 invested in the fund. But if you have $100,000, you’re paying $1,000 per year.

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