6 disastrous 401(k) mistakes
1. Staying locked in the automatic deferral rate
Though the average default deferral rate is hovering near 4%, socking away 4 cents to every dollar is hardly enough to build an income base that will last in retirement. Mr. Castille noted that this deferral rate isn’t a recommended savings rate but rather a rate that employers believe employees will agree to.
Instead, workers ought to ramp up their savings to 10%, combining both their deferral and the company match, according to Mr. Castille. Ask if your plan has auto-escalation features that allow you to raise your deferral rate incrementally.