The 401(k) is one of the best investment tools available to millions of Americans. It's also incredibly underutilized, for a variety of reasons. But if you want to achieve your retirement savings goals, you're going to find it harder to do if you're not being smart with your 401(k). 

Think you're being smart with your 401(k)? Keep reading to learn about three smart, simple moves that you need to make. No matter your age, or how close you are to retirement, these moves will almost definitely mean you retire with more money than if you didn't take them. 

A smiling man sits on floor with a piggy bank as money falls from the sky.

These simple 401(k) moves should pay off with more money when you retire. Image source: Getty Images.

1. Be smart with your old 401(k)s

The first smart move you need to make is to consolidate all your old 401(k)s from former employers. It may seem just as easy to leave them where they are, but there are two reasons that's probably a mistake. 

  1. You're paying higher fees.
  2. It's a lot harder to track your retirement savings progress. 

Let's start with the fees. In general terms, people tend to think you don't pay anything to manage your money in a 401(k). That's completely wrong. You may never get an invoice from the company managing it, but you're still footing the bill. Simply look at the prospectus for the funds your money is held in, and find the expense ratio. This number, shown as a percentage, is what the fund manager charges to run things, and it's the percentage the manager takes from the fund to cover costs. 

An older man protects a piggy bank as someone tries to take it away.

Don't let expensive funds eat into your retirement savings.

For instance, if you have $10,000 in an old 401(k) in a fund charging 1%, that means you give the fund (or, more accurately, it just takes) $100 from your assets each year. Compared with a low-cost index fund that charges 90% less, you're giving money away for no good reason. 

Now, $100 per year may not sound like much, but over decades, it really adds up, since that's money you'll no longer have to invest and grow. Over 20 years, that would be $2,000 in fees paid -- but when you look at the lost capital to compound, you actually end up more than $6,000 short based on stock market long-term averages. Leave that money alone for 30 years at high fees, and you're looking at more than $18,000 in lower returns on the $3,000 in fees you gave away. 

The other point to remember is that the more old accounts you have floating around out there, the harder it is to keep track of your wealth and make sure your money is in the best possible investments. In most cases, the best thing to do is open an IRA and transfer or roll over your 401(k)s into this single account. Consolidating your retirement accounts will give you more control of your wealth and make it easier to maximize your returns. 

2. Contribute as much as you can now. Really. 

Too many retirement savers make the mistake of contributing a small amount now, with plans to increase their contributions later. This move wastes one of the most valuable and irreplaceable advantages you have when you are young: time. 

For instance, if you're making $50,000 per year, each 2% of your salary you contribute is worth $1,000 in contributions. That's about $38.50 every two weeks. Let's compare the value of bumping your 401(k) contributions by $38.50 every two weeks at age 30 versus age 45:

Table showing total returns of $1,000 per year investment at age 65, starting at age 30 and age 45.

Based on $1,000 per year contribution, with 10% annualized rate of return. Chart by author.

Yes, you're reading that correctly. That's a whopping $259,000 in bigger gains, based on the stock market's historical average of 10% annualized returns. The extra $15,000 in contributions from age 30-44 is only part of it, since the saver who started at age 30, would have already accumulated nearly $40,000 in wealth by the time our 45 year-old got started. 

I don't think I can write this enough: Contribute as much as you can as early as you can. It will take a lot more from your paycheck to catch up if you put it off. 

3. Give your retirement savings a raise when you get a raise

Frankly, there's not a better time to bump up your contribution than when you get a raise. After all, you're already accustomed to living within your current income, so your pocketbook won't even feel it if you bump up your savings rate when you get a raise. 

And again, the benefit of increasing your contributions early can pay off significantly over time. For instance, if you get a 2% raise and earn $50,000 per year, and take half of your raise and send it to your 401(k), that's an extra $500 per year you've contributed to your retirement savings. Play that out over 20 years, and that $10,000 in extra contributions would be worth $31,000, based on market averages. 

Make these smart moves, and your retirement will cost you less now -- and you'll have more later

No matter your age, time is your biggest advantage, and time is something you can't replace. If you're reading this article, you've already taken a step in the right direction. Don't stop now -- take control of your retirement savings today with a few simple, smart moves. 

Every day you put it off is a day you lose to help point your retirement savings in the right direction.