One of the best things you can do to set yourself up for a secure retirement is save consistently during your working years. And you have different options in that regard.
Many companies offer a 401(k) plan. If yours doesn't, you can always look to an IRA to house your retirement savings.
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But 401(k)s make saving for retirement exceptionally easy. That's because your contributions are taken as automatic payroll deductions.
In other words, you don't have to remember to send money into your retirement account month after month. Your employer will do that for you, allowing you to stay on track.
But if you're going to save for retirement in a 401(k), it's important to make smart decisions with your money. If you've fallen victim to these mistakes in the past, you may want to aim to correct them in 2026.
1. Not getting your full workplace match
Many companies that offer 401(k) plans also match worker contributions to some degree. If you've missed out on your complete match in the past, aim to make 2026 the year you snag it in full.
When you give up a 401(k) match -- either partially or in full -- you're not just giving up whatever amount you don't snag for the current year. You're also giving up growth on that money.
Say you left $1,000 in matching dollars on the table in 2025. If you're 25 and are retiring at 65, it means your money has another 40 years to grow.
If we apply a yearly 8% growth rate to that $1,000, which is a bit below the stock market's average, we get to almost $22,000. So in that context, missing out on $1,000 is a much bigger deal than you might think -- big enough that you should pledge not to do it again in 2026.
To ensure that you can claim your workplace match in full, figure out what it entails and calculate how much money you have to add to your current savings rate each month. You may be able to find an expense you can cut back on that allows you to make up that difference.
2. Paying too much for your investments
One drawback of saving for retirement in a 401(k) is that you're generally not able to hold stocks individually. Making matters worse is that a number of the funds you're offered in your 401(k) might come with hefty fees that eat away at your returns.
If you've been paying high fees for your investments, you may be losing money for no good reason. And you may want to switch to index funds in the new year.
It's common for 401(k) plans to offer index funds in their lineup of investment choices. Index funds are passively managed, and because of that, their fees tend to be low. And you may find that many of the index funds offered by your workplace plan have a performance history that's comparable to the more costly actively managed funds that are available to you.
To put it another way, switching to index funds in 2026 might save you money on investment fees without compromising your returns in any way. That's a win-win.
3. Not taking advantage of a Roth
Many companies these days offer two 401(k) varieties -- traditional and Roth. It can be tempting to choose a traditional 401(k) for the up-front tax break on contributions. But overlooking a Roth is a mistake that might cost you later.
Roth 401(k)s offer the benefit of tax-free gains and withdrawals. They also don't force you to take required minimum distributions. So all told, they give you a lot more flexibility with your money once you're actually retired.
If you're in a very high tax bracket, it may not pay to save in a Roth 401(k) in 2026. But if that's not the case, it's worth considering one at the very least.
The decisions could make with your 401(k) could spell the difference between meeting your retirement goals or not. So as the new year approaches, pledge to claim your workplace match in full, avoid needless fees, and at least look into whether a Roth account is your better option.
