Biggest 401(k) mistakes I see

Byron Moore 401k mistakes

Byron Moore

Moore for your Money


Question: I’m just about to start in my company’s 401k. I’m super excited, but I am also concerned. I don’t want to mess this up. So what are the biggest mistakes you’ve seen people make with their 401k and how can I not do that?

Answer: James Joyce called mistakes “the portals of discovery.”

So don’t fear making mistakes. Fear not learning from them and repeating the same few endlessly.

Here are four of the most harmful mistakes that, if made and repeated over and over, can do irreparable damage to the financial security of 401(k) participants all over America. However, if these same mistakes are recognized, admitted, learned from and then run from, they might just do some good.

Mistake #1: Under-saving. The first big mistake I see all over America is under-saving, be it in 401(k) plans, mutual funds, bank accounts or a shoe box. Americans simply are not saving enough money. There are many positive aspects of our consumer-oriented society, but those positives are not enough to eclipse under-saving.

You must save early enough and in adequate quantities if you ever want to become financially independent.

Mistake #2: Financial paralysis. Most of us are investment illiterate – innumerate, some have called it. We don’t understand the basics of mutual funds, retirement plans and the like and we don’t like asking for help. Often 401(k) participants don’t understand the investment choices available to them in their company’s 401(k). And what people don’t understand, they usually avoid. In this case, avoidance equals inaction – they freeze.

And since time stands still for no man (or woman), repeating this mistake will cost you precious time – time in which your money should have been growing.

Mistake #3: Never updating. The third big mistake is failing to make financial changes to reflect the fact that YOU are changing.

When you are young and have 30+ years to go until retirement, it makes sense to accept a great deal of investment risk. But as you move closer to retirement, it makes more sense to take much of that risk off the table.

Too many “set it and forget it,” ignoring their 401(k) asset allocation. This can be a costly mistake if a bear market makes a regular, if unwelcome, visit just before you collect that gold watch.

Mistake #4: Always reacting (emotionally). Fourth, and final, is emotionally reactive buying and selling. This is also known as buying and selling on fear and greed.

DALBAR reports that in 2014, the S&P 500 had a 20-year annual rate of return of 13.69%, yet the average equity investor only achieved a 5.5% return. How does such a huge disparity occur?

It’s the result of reacting emotionally to the market movements, rather than having a disciplined approach to investing. Emotions (such as fear or greed) prompt us to do the wrong thing at the worst time. For example, when investors sell after markets have fallen, they lock in their losses. Conversely, when investors keep buying what was “hot” yesterday, they chase yesterday’s performers and wonder why it seems the juice has already been squeezed out of the fruits of their labors.

So don’t worry about being perfect with your investments. Be humble, seek help and be a lifelong learner about money and investments.

Do so and you’ll discover, like Joyce described, that your investment mistakes can open investment “portals of discovery” for you, too.

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Byron R. Moore, CFP® is Managing Director / Planning Group of Argent Advisors, Inc. Mike Jones is Managing Director / Investment Group of Argent Advisors, Inc. Write to either at 500 East Reynolds Drive, Ruston, LA 71270 or call (318) 251-5800. This newsletter is available via email on a free subscription basis. You can subscribe by clicking here. Direct any questions, comments or suggestions to Byron Moore at or to Mike Jones at
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Argent Advisors, Inc.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. The opinions of any single advisor do not necessarily reflect the opinions of Argent Advisors, Inc. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Argent Advisors, Inc.. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.
Argent Advisors, Inc. is a registered investment adviser registered with the Securities and Exchange Commission. Argent Advisors, Inc. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. Argent Advisors, Inc does not offer tax, legal or insurance advice. If you are a Argent Advisors, Inc. client, please remember to contact Argent Advisors, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Argent Advisors, Inc.’s current written disclosure statement discussing our advisory services and fees is available upon request.


Argent Financial Group

Celebrating its 30th anniversary in 2020, Argent Financial Group (Argent) is a leading, independent, fiduciary wealth management firm. Responsible for more than $30 billion in client assets, Argent provides individuals, families, businesses and institutions with a broad range of wealth management services, including trust and estate administration, investment management, ESOPs, retirement plan consulting, funeral and cemetery trusts, charitable organization administration, oil and gas (mineral) management and other unique financial services. Headquartered in Ruston, Louisiana, Argent was formed in 1990 and traces its roots back to 1930.

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