Money Guy Show
401(k) Mistakes That Could Cost You Millions
Mar 7, 2025
Discover the common mistakes that can cost you millions in your 401(k) plan. Learn why non-participation and delaying contributions are critical errors in wealth building. The discussion highlights the dangers of keeping retirement funds idle and the importance of proactive management. Gain insights into maximizing employer matches and automated contributions to grow your savings. Enjoy engaging anecdotes that reveal the long-term consequences of financial inaction. Prepare to transform your retirement strategy and secure your financial future!
39:33
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Quick takeaways
- Not participating in a 401(k) can lead to missing over $3.5 million in potential savings by retirement due to compounding benefits.
- Failing to take advantage of employer matches can cost individuals around $1 million in lost retirement savings, highlighting the importance of understanding these contributions.
Deep dives
Importance of 401k Participation
Not participating in a 401k can lead to significant missed opportunities for wealth building. Statistics show that nearly 40% of individuals with access to a 401k are not contributing, often due to a misunderstanding of their enrollment status. For example, someone making a median household income of around $80,000 could miss out on over $3.5 million by not participating from age 20 to retirement. It's crucial to recognize the long-term benefits of starting contributions early, as even modest savings can accumulate significantly through the power of compounding.
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