Saving enough money for a comfortable retirement is a major challenge for most workers, but having access to a 401(k) at work can help. A 401(k) allows you to invest with pre-tax funds and, in some cases, to become eligible for an employer match.  However, your 401(k) is what you make it -- and if you don't use this tool the right way, your chances of a financially secure retirement can be greatly diminished. 

To make sure your 401(k) has a big enough balance to see you through your golden years, be sure to avoid these three key 401(k) mistakes. 

401(k) money in envelope

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1. Investing too little

The maximum contribution limit to a 401(k) account in 2017 is $18,000, or $24,000 if you're over 50 and eligible to make a catch-up contribution. Most Americans, however, don't contribute the maximum. In fact, the average contribution to a 401(k) account is 6.8% of worker earnings, or about $3,155 for those earning the average income of $46,409. 

If you started making these contributions at age 30, worked until age 65 and earned 7% on your investments, you'd end up with just $436,137 by retirement, which is far less than you'll need to be financially secure.

Even following the conventional wisdom of saving 10% of your income is probably insufficient, given that people are living longer and interest rates are near historic lows. To make sure you aren't shortchanging your future self by contributing too little, determine how much retirement income you'll actually need and base your contributions on achieving your goal. 

2. Waiting too long to start investing

When you're in your 20's, retirement is probably the furthest thing from your mind. Unfortunately, the longer you wait, the more substantial the amount you must save each month to end up with enough cash. Compound interest allows you to make small contributions throughout your career and end up with millions, whereas waiting until the end of your career to save means it will be virtually impossible to retire a millionaire

This chart shows how much you need to save when starting at different ages if you earn a 7% return, retire at 65, and want to retire with around $1 million. As you can see, waiting carries a very high price, as you'll need to kick in almost $700,000 more of your own money to retire a millionaire if you wait until 60 to begin saving, compared with starting at 20. 

Age You Begin Investing

Monthly Savings to Become a Millionaire

Total Invested

20 $263.67 $142,381.80
30 $555.23 $233,196.60
40 $1,234.46 $370,338.00
50 $3,154.95 $567,891.00
60 $13,967.87 $838,072.20

3. Not actively managing your investments

When you're investing throughout your career, you need to keep a careful eye on where your cash is going. First and foremost, it's important to make sure you're allocating your investments appropriately. You want a diversified portfolio with the proper level of risk exposure based on your age.

If you're invested too heavily in stocks as a senior, you put yourself at risk of big losses in a market downturn -- but if you invest primarily in low-interest bonds when you're young, you're unlikely to have enough to retire even if you invest a generous share of income. If you begin investing at 30 and earn only a 4% return with a conservative portfolio, you'd need to almost double your investment amount to $1,094.41 per month to have $1 million by retirement. 

When you're checking on your investment allocation, you'll also want to watch out for investment fees. If you begin investing at 30, put aside $555 monthly in a 401(k) and earn a 7% return, your investment would be worth more than $330,000 more if you paid only a .5% fee compared with a 3% fee during your 35 years of investing. One downside to 401(k) accounts is you sometimes have limited investment options -- so carefully check for fees on funds you're investing in to make sure your costs are as low as possible. 

Monitoring your investments carefully throughout your career allows you to make certain you aren't being being soaked by high fees or being either too conservative or too aggressive -- and it also allows you to avoid ending up too heavily invested in a particular asset class. It's worth the effort, since it's your future financial security at stake.