Beyond a shadow of doubt, this Certified Financial Planner® believes that the worst Retirement Income Planning error is not developing a source of income other than Social Security. All other errors and oversights pale by comparison, because to rely on Social Security is to take an Oath of Poverty. That system wasn’t, isn’t, and will never be, a stand-alone retirement plan.

Roughly 65% of American workers have access to a Defined Contribution Plan, which includes 401(k), 403(b), and 457 Plans. Fortunately, recent implementation of automatic enrollment has been an inducement to get increased participation, especially for younger people. For today, we are focused on participants in these Plans, using the 401(k) as our proxy for all.

Employers sponsoring these Plans have limited responsibility for the results of their individual employees. This should incentivize participants to learn as much as possible, thereby accepting personal responsibility.

Learning good habits for your own 401(k) account is surprisingly easy and inexpensive, with sufficient free information to all. Numerous Internet sites are supplemented by media sources on television and radio. We do our teaching every Saturday morning on the Van Wie Financial Hour radio program, and lately we are pointing out obvious errors people make.

1. Not signing up early enough was assisted by the new auto-enrollment Plans, but not all employers use that feature.
2. Not contributing enough to secure the matching funds is a common problem, and many participants who think they doing enough are incorrect, and are leaving money on the table.
3. Taking insufficient risk by investing only in Money Market Funds, Bond Funds, and Certain Target Date Funds is common with young participants, who might do better with higher equity (stocks) exposure.
4. Distributing the entire balance in cash when leaving the company is all too common, when the balance could be Rolled Over into the new Employer’s Plan or a personal IRA.
5. Not seeking investment advice from a trusted independent financial advisor.
6. Not taking advantage of the Roth alternative (assuming the Plan offers one) while the participant is in a low Income Tax Bracket presents an “opportunity cost” later in life, when growth and withdrawals would be tax-free.

This list is far from exhaustive, but it should serve to highlight how a young, ambitious worker can be more successful in retirement.