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Bad 401(k)? How to Make the Most of It

401(k) plans can be great ways to save for retirement, but some 401(k)s are better than others. If you're stuck with a bad retirement plan at work, what's the best way for you to make the best of a bad situation?

In the following video from The Motley Fool's series on retirement investing, sponsored by TD Ameritrade, Fool consumer finance expert Dayana Yochim talks to Dan Caplinger, the Fool's director of investment planning, about how to make the most of a bad 401(k). Dan notes that many 401(k) plans have high fees and limited investment choices that aren't appropriate for retirement investing, leaving workers uncertain about whether they should use them at all. Yet Dan notes that even though your options can be limited, it makes sense to try to contribute at least enough to get your full employer match, especially if there's a single low-cost index-fund option that can meet your needs. In addition, Dan recommends looking at IRAs to supplement your retirement savings if your 401(k) isn't ideal.

Don't forget this key retirement income source
A bad 401(k) can cost you some income in retirement. That makes your Social Security benefits even more vital. In our brand-new free report, "Make Social Security Work Harder for You," our retirement experts give their insight on making the key decisions that will help ensure a more comfortable retirement for you and your family. Click here to get your copy today.


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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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