Are You a Self-Destructive 401(k) Participant?

We've met the greatest enemy of a sound 401(k) plan, and it is us.

Though we may not choose to admit it, most of us make enough ridiculous mistakes to inspire Fox to create a new reality series, America's Dumbest Investors. With that in mind, let's take a look at some of the most self-destructive behaviors individuals engage in with their 401(k) plans.

If none of these characteristics apply, bully for you. For the rest of us -- myself included -- we should take a long, hard look to see if these patterns sound familiar.

Do-Nothings

The first big impediment to retirement planning is inertia. Studies have shown that 25% of all eligible employees don't even bother to enroll in their 401(k) plans. Except for the folks who decide to opt out because their plans are so inadequate that they are investing in their own individual retirement plans, this is silly behavior.

Twenty-somethings are especially guilty in this area -- which is awful, because the money you invest when you're young grows exponentially. Consider this investment fable, borrowed from Burton Malkiel's Random Walk Guide to Investing. William and James are twin brothers aged 65. Starting 45 years ago, William put $2,000 in his 401(k) plan at the end of each year. After 20 years, he stopped making contributions and let his 401(k) keep growing -- he got 10% returns a year. James started investing in his 401(k) plan when he was 40, right as William quit, and contributed $2,000 a year for 25 years -- five longer than William. James also got 10% returns a year.

What did William and James retire with at 65? James' 401(k) is worth less than $200,000. William, meanwhile, has more than $1.2 million in his 401(k).