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Even More Money Mistakes: Messing With Your Retirement Plans

BOSTON (CBS) - These are money mistakes employees often make with their retirement plans.


  • Not contributing to your retirement plan because you don't like the choices. Even a mediocre plan is better than no plan especially if your employer matches.
  • Not taking advantage of your employer's matching contribution. The match is free money!
  • Choosing the "safest" investment without understanding that all investments have risk.
  • Choosing the most aggressive investment thinking it will produce the greatest return.
  • Basing your investment choices on what your friend has chosen for her portfolio.
  • Putting all retirement assets into company stock. Not prudent to have more than 25 to 35% invested in company stock. Some experts will tell you at the max 10% but try to tell that to the Goggle employees. The risk here is that there is no diversification.
  • Cashing out your retirement savings when you leave your job. Over 50% of plan participants take the money and spend it rather than roll it into an IRA. Let's say you have $5,000 in your retirement plan, the company is required to withhold 20% for taxes if you want to take your money out. So you'll get $4,000.

When you file your taxes you will owe a 10% penalty, which will amount to $500. If you had left that money in a tax deferred account for another 30 years and you got an 8% return, you would have over $50,000.

  • Making choices based simply on the number of funds. If the company offers 10 funds, you put 10% into each fund.
  • Making investment selections for a retirement plan without taking into account what else you own. You should be looking at your aggregate portfolio including a spouse's retirement plan as well as your personal investments.
  • Trying to time the market. This often leads to employees selling low and buying high.
  • Not regularly checking account statements against pay stubs to be sure the account is being credited properly and your contributions are invested as selected



You can hear Dee Lee's expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m. and 3:55 p.m.

Subscribe to Dee's Money Matters newsletter here.

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