Investing in a 401(k) plan is a common way to save for retirement. It involves depositing a portion of the salary every month in a 401(k) account. However, to get the most out of 401(k), one needs to follow the right steps, which may not always be clear without prior research. So, one may end up making mistakes with their 401(k) plan that can leave them with not enough funds. 1. Ignoring the types of 401(k) account In general, one has two options to consider—a traditional 401(k) and a Roth 401(k). There are significant differences between the two. For instance, with a traditional 401(k), the contributions are made before the tax is imposed. So, no tax has to be paid on the amount that goes into the 401(k) account. The money is taxed only when it is withdrawn, i.e., after retirement. On the contrary, in a Roth 401(k), taxes are imposed at the time of contributing the employee’s share. Understanding these differences is crucial for choosing the type of 401(k) account that aligns with one’s financial goals. 2. Not utilizing employer match programs Many employers offer 401(k) matching programs. Here, employers contribute the same amount of money as the employees into the 401(k) accounts.