The 401(k) is perhaps the most powerful retirement savings tool available to American workers. You can save huge sums of money in it -- up to $18,000 per year if you're under age 50, or $24,000 if you're 50 or older -- and you'll get some generous tax breaks for doing so. And assuming you like free money, most employers that offer 401(k)s will also match a portion of their employees' contributions.

On top of all that, saving in a 401(k) is easy as can be. Just tell the person in charge of payroll how much of your wages you want to go into the account, then sit back and watch your savings grow with every paycheck.

Despite all of those perks, only 41% of workers who are offered a 401(k) make use of it, according to the U.S. Census Bureau.

401(k) envelope with cash sticking out


What's also surprising is how participation rates break down by age. According to a recent study by Bank of America Merrill Lynch, younger workers aged 21 to 34 are the most likely to contribute money to a 401(k), followed by workers aged 35 to 49. Coming in dead last are older workers aged 50 to 68 -- the workers who are closest to retirement.

Here's why that's a problem: Most workers in that 50-to-68 age group don't have nearly enough money saved up to support themselves in retirement. Nearly half of them don't even have a penny, according to the Economic Policy Institute. The fact that more older workers aren't using their 401(k)s to play catch-up means that they've either given up hope or expect to get by primarily on Social Security. And neither scenario is good.

Why aren't older workers saving in 401(k)s?

You'd think younger workers would be the least likely to participate in their 401(k) plans. After all, they typically earn the lowest salaries and carry huge sums of student debt. But apparently, older workers have their own set of barriers to contend with. Some may be trying to pay off mortgages or putting their children's college education above their own retirement savings, for example. For others, however, it might be a matter of miseducation.

A large number of workers have been led to believe that Social Security provides enough income for seniors to get by in retirement, but that couldn't be further from the truth. The average Social Security enrollee currently receives around $1,360 a month, or $16,320 a year, in benefits. A dual-income household, therefore, collects $32,640 a year, on average. But neither amount comes close to allowing seniors to sustain themselves without additional income, especially when you consider that the average healthy 65-year-old couple today will spend a whopping $400,000 or more on medical costs in retirement, not including long-term care.

That's why it's crucial for older workers to ramp up their savings game, and opting into a 401(k) is one of the easiest ways to make that happen. Furthermore, because 401(k)s have such generous annual contribution limits, those in their 50s or even early 60s have a great opportunity to catch up, even if they're starting from nothing.

Imagine you're 55 years old with the goal of retiring at 67. If you begin maxing out your 401(k) immediately, and your investments generate a relatively conservative 5% average annual return, you'll accumulate $382,000, which can go a long way in retirement.

Older couple discussing finances, looking serious


Even if you can't max out your 401(k), contributing something is better than passing up a key savings opportunity. Putting just $600 a month, or $7,200 a year, into a 401(k) will leave you $114,000 richer over a 12-year period, assuming that same 5% return. And while that's still a relatively small nest egg to work with, it's far better than entering retirement with no savings at all.

Now if you're in your early 60s, you'll really need to step up your savings if you want a shot at a secure retirement, but if you max out your 401(k) starting at age 62, and are willing to work until age 70, you'll come away with $229,000, assuming a 5% average yearly return. And again, that's an improvement over $0.

One final thing to keep in mind about 401(k)s is that 92% of companies that sponsor them also offer some type of matching incentive. Contribute enough to capitalize on that match, and you'll collect some free money to pad your nest egg. And that, combined with your last-ditch savings efforts, might allow you to salvage your retirement, even if you have been neglecting it thus far.