Key Takeaways
- Maxing early in the year can forfeit match dollars unless your plan has a true-up provision; check before front-loading.
- The after-tax mega-backdoor Roth space above the normal limit is the most underused benefit in corporate America.
- Old 401(k)s scattered across employers usually mean high fees, forgotten allocations, and rollover paperwork worth doing.
The 401(k) is where most professionals hold the bulk of their retirement wealth, and it mostly runs on autopilot, which is exactly why the same handful of mistakes persist for years unnoticed, quietly costing five and six figures. All seven below are checkable in an evening against your plan documents and last statement.
Mistakes 1-3: Contribution Mechanics
First, not capturing the full match, still common at high incomes when deferrals hit the annual cap mid-year: if your plan matches per paycheck without a true-up, the paychecks after you max out earn no match. Fix: spread contributions so a deferral lands in every pay period, or confirm your plan trues up. Second, stopping at the match when you could max: the 2026 employee limit is $24,500 (plus catch-up from 50, with a larger one at 60-63), and unmaxed years never come back. Third, ignoring the Roth 401(k) option in low-tax years; the pre-tax default is not always right, especially early in careers or in gap years.
Mistakes 4-5: the Hidden Space
Fourth, missing the mega-backdoor Roth. Some plans accept after-tax contributions above the normal limit, up to the overall cap of $72,000 for 2026 counting all sources, and allow in-plan Roth conversion or in-service rollover. That can mean tens of thousands per year of extra Roth space, and most eligible employees have never heard of it. Fifth, holding excessive employer stock; the same paycheck-and-portfolio concentration logic in our concentration guide applies inside the plan, where company-stock funds accumulate by default in some match structures.
Try it: the free Retirement Readiness Calculator takes a couple of minutes and shows you where you stand. Or explore retirement planning at Attend.
Mistakes 6-7: the Neglected Machine
Sixth, never revisiting the investment menu: target-date defaults are fine, but high fees, duplicated funds, or an allocation set during a different decade deserve an annual half-hour. Watch for index options added since you enrolled; menus improve quietly. Seventh, orphaned accounts at former employers, with forgotten allocations, full-freight fees, and beneficiaries from a previous life. Consolidating into your current plan or an IRA simplifies everything, though keep the IRA question in view if you use the backdoor Roth, where pre-tax IRA balances create pro-rata tax problems.
The Annual Checkup
Once a year, verify: on pace to max, match fully captured, after-tax space used if available, allocation on target, fees understood, beneficiaries current. Twenty minutes, six answers, and most of the seven mistakes become impossible.
The free Wealth Checkup catches the account-level gaps, and our retirement planning service handles the design questions, especially rollovers, Roth timing, and coordinating spousal plans.
Frequently Asked Questions
Should I contribute pre-tax or Roth?
A useful default: pre-tax at high marginal rates, Roth in low-tax years. Many high earners do pre-tax in the plan and build Roth through backdoor contributions and conversion windows.
How do I know if my plan allows the mega-backdoor Roth?
Search the summary plan description for after-tax contributions and in-service distributions or in-plan Roth conversion, or just ask the plan administrator both questions directly.
Are 401(k) fees really worth worrying about?
A half-percent of annual fees on a growing balance compounds into six figures over a career. You cannot control the menu, but you can pick its cheapest sound options and lobby HR for better ones.
Tony leads Attend Wealth, a fee-based wealth management firm in Atlanta serving professionals, families, and business owners. Advisory services are held to a fiduciary standard. More about Attend
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