Taking Care of Your 401(k)

Now that the economy is producing jobs at a healthy pace again, if you're changing jobs you may need a refresher course on 401(k) retirement savings plans -- especially if, like many people, it's been years since you've paid much, or any, attention to it.

About 51 million people contribute an average of 8% into these self-directed retirement plans, which have largely replaced company-sponsored pension plans and may now be more important than ever with Social Security reform growing more likely in the coming years.

Experts say too many people fail to take full advantage of their 401(k), through inadequate participation, neglected allocation and unnecessary withdrawals, all of which will very likely crimp retirement finances.

"These make a very large percentage of employees into money managers, whether they thought they were going to be or not," says Don Cassidy, an analyst at Lipper.

How They Work

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