Retirement Retirement Planning

This Could Be the Biggest 401(k) Mistake You Could Make in 2026

And you might not realize you're making it.

By Catherine Collins

Edited by Amanda Machado

Updated Jan. 28, 2026

When it comes to 401(k) retirement plans, most people focus on saving and investing consistently throughout their careers. However, one of the biggest mistakes people make isn't starting too late or choosing expensive investments. Rather, the biggest mistake people make is not taking full advantage of their employer's match.

While an employer's 401(k) match seems simple on the surface, employers offer different perks, with some offering generous matches and others not offering one at all. It's important that when you choose a company or switch jobs, you take a close look at the employer's matching plan, with the complete understanding that employers can change their benefits from year to year.

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Why employer matching isn't just a perk

Your employer's match is more than a job perk. It can be the key to having enough money to retire one day. Another way to look at it is that your employer match is extra compensation on top of your annual salary. Your employer match doesn't require any extra work or late nights at the office. Instead, it's something in your contract that you get simply for doing your part.

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The mistake: not getting the full match

Many employees might be contributing to their 401(k) plan without realizing they must meet a threshold to receive their company's match. With rising prices on everyday items and inflation affecting day-to-day living, many people might not be contributing enough to maximize their employer's match.

However, even losing 1% of a match could translate to tens of thousands of dollars in lost investment returns over the course of a career. That's why ignoring your employer's match is an expensive mistake.

Why missing the match is a bigger problem near retirement

Early in your career, not getting the employer match is unfortunate but not a deal-breaker. When you're young and have decades of work ahead of you, you have time to invest in your future.

However, missing the match when you're near retirement is a bigger problem because you can't make up for the loss later in your career. If you are trying to retire in the next few years, your employment match could make the difference between retiring on time and working a few more years.

The importance of 401(k) match vesting

Another important part of an employer match is your employer's vesting schedule. Vesting is when your employer's 401(k) contributions legally belong to you. Some employers offer immediate vesting of any matching contributions to your 401(k). Other employers require you to work for a certain number of years before you receive your full match.

Knowing this information can help you determine how long to stay at your job so you don't get an unfortunate surprise, thinking you have a certain amount in your 401(k) when you actually don't.

What to do during a job change

Changing jobs during your career has become more common. However, it's important to understand the consequences of moving jobs and how it might impact your employer match. Depending on when you move jobs, it might or might not affect your employer's vesting schedule, according to information from Fidelity Smart Money.

Typically, employees have several options when leaving an employer, including rolling over a 401(k) into their new employer's 401(k) or into an IRA. When evaluating an employer, look beyond just the percentage of a match they offer. Find out whether or not your money is immediately vested too.

How to review your 401(k) plan each year

Employer matching policies and IRS contribution limits can change each year. For example, in 2026, the contribution limits for 401(k) s increased to $24,500. Every year, review your plan details, contribution limits, and any plan changes. Make sure to read your employer's emails or notices, especially regarding your 401(k)s. That way, you can stay up to date on the latest changes.

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How to adjust spending to max out your 401(k)

The easiest way to max out your 401(k) is to direct any raise or bonus that you get at work to your retirement account. This is extra money you're not used to getting, so you won't miss it if you send it straight to your 401(k).

If you want to max out your 401(k) every year but worry you'll need more take-home pay, the other thing you can do is to pay attention to your spending at home. Writing down your expenses can help you stay aware of your spending patterns. Typically, the biggest drains on people's household budgets are housing, transportation, and food.

Bottom line

The biggest mistake people make with their 401(k) s is not taking advantage of their employer's 401(k) match. This is free money that employees are entitled to if the company offers it and they meet certain criteria. The extra money you get from an employer match can make the difference between you retiring comfortably and having to work for a few more years. For that reason, it's worth paying close attention to your company's 401(k) match policies and taking advantage of them as much as possible.

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