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Commonly made mistakes regarding 401(k)'s

07/26/11

Many companies around the country offer 401(k) plans to their employees. While these programs usually offer a good way to save money with added help from employer contributions, a recent article published on U.S. News Money highlights some of the common mistakes made regarding 401(k)'s.

One of the most commonly made mistakes is not being familiar with your personality and what type of investor you are. Some people choose their 401(k) investments solely based on those of their coworkers or friends without giving thought to whether they'd like to be more conservative or aggressive in their choices.

Another common pitfall surrounds not reviewing your 401(k) account. Market fluctuations cause various portfolio sectors to increase and decrease, and regularly reviewing your 401(k) can show you where there's room for improvement in your investment choices.

A number of 401(k) investors don't calculate how much they'd like to save by their time of retirement and choose a contribution rate arbitrarily. Taking the time to plan ahead can help ensure that you don't run out of funds during your golden years.

According to a 2010 study conducted by the Employee Benefit Research Institute, 43 percent of American workers have less than $10,000 in retirement savings. Annuities are a good option to consider for those looking for more ways to maximize their retirement funds.

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