Perfecting Your 401(k)

We all know 401(k)s are an important part of our retirement plans, but there are some mistakes that can hurt you more than help you. Here's how to stay 401(k) happy.

Overinvesting in company stock.

Don't believe us? Ask the former employees at Enron.

Inappropriate risk and asset allocation.

Talk to your 401(k) expert and see who they recommend you speak to about your risk tolerance and asset allocation options. If you're 20 years old, you need more than bonds, period. Conversely, if you're 50 years old, you need more than junk bonds and stocks. If you're not sure what's right for your particular situation, keep asking until you are!

Not contributing.

Not contributing means you'll be working the rest of your life—unless you're lucky enough to win the lottery. And the odds that you'll actually win the lottery are about 1 in a million; in fact, there's a not so funny joke that says you're more likely to get hit by a bus than you are to win the lottery. Our advice: look both ways before crossing the street and make sure you contribute to your 401(k). [U.S. News]