To help employees save for retirement, employers offer a 401(k) plan through which employees can make tax-deferred contributions toward their retirement savings. However, too many employees just don't take full advantage of their 401(k) plan, and those who do must be sure not to sabotage their retirement planning by tapping into it to meet random cash-flow needs, according to financial advisors Lazetta Rainey Braxton and Shannon Eusey.
Understanding and maintaining your 401(k) plan is key to becoming retirement-ready. Keeping an eye on your investments, making sure to capture matching contributions and rebalancing regularly are a few key steps toward saving for retirement, said Eusey, who urges investors to avoid making costly mistakes with their 401(k) plans. Eusey is founder of Beacon Pointe Advisors.