Your retirement account is something that you should take very good care of, since that is precisely what will help you take care of yourself and your loved ones when you retire. If you are going to make a mistake in investing, you don’t want to let it be inside your retirement portfolio. Here are some common mistakes and how to avoid them.

Four common retirement investment account mistakes to avoid

1. Speculating inside the account- The retirement account is not a place where speculation should occur at all. Far too many people try to be the hero and use things such as options or other extremely speculative asset classes inside a retirement investment portfolio. Yes you can be more aggressive when you are younger, but that doesn’t mean you should run rampant speculating in such an important investment portfolio. Save the speculating for your regular investment brokerage account.
2. Using the retirement account like a bank account- Please understand that using something such as a 401k retirement account or an IRA as a bank account to pull money out of for special projects or odds and ends is a terrible idea. The retirement account should stay intact unless the money absolutely must come out for a dire reason.
3. Not accounting for your goals and age- With a retirement investment account you should always plan specifically for your individual situation and what you will need. As time goes on and it becomes clear exactly what your needs will be you can modify your plan.
4. Not taking advantage of employer matching- If you have any kind of retirement account with an employer matching contribution you should take advantage of this as much as you can. These company matching 401k plans can be a major boost to your bottom line.

Protect that retirement account and don’t make these huge mistakes with this very important money.

If you have a 401k plan you have likely checked the amount you have in it lately and been extremely disappointed with your returns. The stock market has caused many employees to have their hard earned money places in a 401k slashed down to a much lower level. The important thing I want to point out to employees and investors is that the 401k is still a very powerful tool to use in building a nest egg for retirement.

What is so great about a 401k? The simplest benefit of a 401k can be the time value of money and the power of compounding interest over time. That small amount of money that you invested when you were 26 years old will mean a whole lot to you when you are retiring. A 401k is also a very flexible investment tool. You are in the driver’s seat as far as the investments in your plan, and these assets can be moved at any time. An increasingly important part of the 401k is the employer matching plan. Most employers now match employee contributions up to a certain level on an annual basis. For example, if your employer matches dollar for dollar your contributions up to $1,000, you can get a free $1,000 put into your 401k plan each year.  Perhaps the most important benefit of the 401k plan is the tax advantages it brings with it. The dividends, capital gains, and interest are not taxed until they are paid out.

What is the bottom line here? The bottom line is that while many of you may be hurting in your 401k investments right now, this is not the time to stop investing in a 401k plan. During the worst of economic times, such investment vehicles are only that much more important. Take advantage of the benefits of a 401k plan, especially the employee matched benefits. If you aren’t contributing the amount your employer is willing to match, you are just leaving free money on the table. Even in tough economic times, take advantage of the sweet deal that is the 401k plan.