Try this on for size. A new study shows that of some one million 401(k) portfolios, some 69 percent of participants have portfolios with inappropriate risk or diversification, 36 percent hold high concentrations of company stock, and 33 percent fail to contribute enough to receive the full company match. While groups of participants are taking full advantage of their 401(k) plans, participants with lower salaries, lower plan balances, and those closer to retirement tend to make the most costly mistakes.
Financial Engines, which provides independent investment advice and managed accounts, has released The Financial Engines National 401(k) Evaluation, a new report that assesses 401(k) participant portfolios to determine how well Americans are handling their plans. The report also estimates the costs associated with common investing mistakes.
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