Money and You: Some Advice Worth Saving Copley News Service (08/06/01) Vol. 158, No. 6 p.H01; Perry, Ann
Retirement authority Lynn O'Shaughnessy says people sabotage
their retirement planning efforts by making expensive mistakes.
According to O'Shaughnessy, workers often make the mistake of cashing
out their 401(k) retirement plans when they switch jobs. After
withdrawal penalties and federal and state taxes are added up, workers
end up paying 40 to 50 percent in taxes, netting losses of thousands of
dollars. Another way O'Shaughnessy says investors lose money without
realizing it is by not tracking their investment costs closely enough.
People can avoid this trap by scrutinizing the costs of their retirement
fund investments. Other bad habits people should avoid include failing
to diversify, loading up on company stocks, failing to double check
statements for mistakes, and borrowing against their 401(k)s.