10 Ways Your 401(k) Can Fail You

A study released in March by MetLife(MET) found that nearly half (49%) of surveyed employees said that because of the economy they are counting on employers' benefits programs to help with their financial protection needs.

The survey also found that only 39% of employees feel "very confident" in their ability to make the right financial decisions; 72% wanted financial education programs made available in the workplace. Meanwhile, 91% of employers said they "feel strongly" that benefit programs can be used to retain employees; 86% said they "greatly increase" employee productivity.

A solid 401(k) offering would certainly seem a win-win for all involved. Nevertheless, your retirement security is still -- for better or worse -- in the hands of your employer. That 401(k) match you get can come or go with the company's bottom line. Other employees push company stock as part of their "match," something that -- loyalty aside -- isn't always a smart, compatible investment. Unscrupulous managers could even take kickbacks in exchange for pushing fee-heavy offerings or take loans against the plan.

5. Bad management

Is your 401(k) being properly managed? Even the best plan can fall victim to oversights and mistakes with the potential to erode your savings.

The IRS keeps tabs on common mistakes made by benefit providers. Among the problems: not updating plan documents; failing to operate in compliance with plan documents; not following procedures for deferrals and allocations; inconsistencies with contribution matches; depositing elective deferrals in a timely fashion; and making sure loans and hardship distributions were handled properly.

6. Complacency

Your 401(k) can make it feel a bit like a savings account. Don't treat it that way, however. It may be designed to "set it and forget it," but don't be lulled.

No matter how much control you exert, many day-to-day, quarter-to-quarter decisions will be out of your hands. The importance of having competent people working behind the scenes on your behalf has already been stressed. But even if you are happy with returns and service, make sure to always keep tabs and follow where your money goes.