If you work for a company that offers a 401(k), you're in luck, because participating in a 401(k) is one of the easiest ways to accumulate wealth for retirement. Unfortunately, there's a lot of misinformation out there regarding 401(k)s, and if you buy into it, you could end up losing out. Here are three common 401(k)s myths you can't afford to believe.

1. Most Americans don't have access to a 401(k)

Though it's true that most employers don't offer a 401(k), the majority of working Americans have access to one nonetheless. How is that possible? Larger companies -- those that employ the highest number of workers -- are more likely to sponsor retirement plans. In fact, an estimated 79% of Americans work for such employers, which means they have the option to participate in a 401(k) plan should they choose to do so.

Smiling older man


That said, a large number of workers do indeed opt out. Of those with access to a 401(k), only 41% fund their accounts. It's estimated that just 32% of the total workforce saves in a 401(k). 

2. IRAs are better than 401(k)s

If there's one major drawback associated with 401(k)s, it's their limited investment choices. Not only might this hurt your ability to fund suitable investments, but it's likely to drive your fees way up. In fact, the average American worker who starts earning a median salary at age 25 will lose an estimated $138,336 in lifetime 401(k) fees. IRAs, by contrast, typically offer a much wider range of investment options and lower fees to go along with them.

On the other hand, if there's one major advantage 401(k)s have over IRAs, it's their generous annual contribution limit. For the current year, workers under 50 get to put up to $18,000 away, while those 50 and older are allowed up to $24,000. Come 2018, these limits will increase even further, capping out at $18,500 and $24,500, respectively. IRAs, by contrast, allow younger workers to contribute just $5,500 a year, while those 50 and over are subject to a $6,500 limit.

That's why it often pays to fund a 401(k) and IRA simultaneously, especially if you're not thrilled with the investment options offered by your employer's plan. Contrary to what you may have heard, you can contribute to an IRA even if you already have a 401(k). Whether you get a tax break out of it, however, depends on your income level.

3. 401(k)s don't require much hands-on management

While contributing to a 401(k) doesn't require much work -- all you really need to do is decide how much of each paycheck to allocate to your account and your employer takes care of the rest -- the last thing you want to do with a 401(k) is set it and forget it. As you progress in your career and creep closer to retirement, you'll want to balance your investments to ensure that you're not taking on too much risk. Similarly, if you find early on that your investments aren't producing the returns you'd hoped for, you'll want to shift things around before losing out on too much income potential.

Once you start participating in a 401(k), make a point to review your investments several times a year to not only track their performance, but make sure they continue to align with your goals. You don't necessarily need to change your allocations if they're working for you, but examine your accounts regularly to make sure that's actually the case.

The more you read up on 401(k)s, the better positioned you'll be to make the most of your account. So take the time to learn more about how these plans work and research the best investment choices out there. If you play your cards right, your 401(k) could be the ticket to the comfortable retirement you've been working for all along.

The Motley Fool has a disclosure policy.