A 401(k) is a prime way to build wealth, but there are plenty of pitfalls to watch for.

Anytime money is withdrawn from the account before the age of 59.5, a 10% penalty typically applies. 

"If you look at the mistake millenials make, one out of three, when they leave their [job], cash out the 401k plan," said David Bach, founder of AE Wealth Management and a panelist on TheStreet's Investing Strategies for Millennials webinar. "If you want to destroy your retirement plan, leave your company and cash out it out."

Check out our entire millennial investing roundtable here.