More Americans than ever rely on 401(k) plans to save for retirement. And to say the plans are increasingly popular is an understatement. Assets in 401(k) plans surpassed $3 trillion at the end of 2007, according to the Investment Company Institute, a national association of U.S. investment companies.
Yet when we get our 401(k) statements, most of us glance at the balance and toss the statement aside like an old newspaper. We take for granted that our 401(k) contribution ends up where it's supposed to -- in our retirement plan. It's a long-term investment account, so why worry about it now, right?
Most of the time the process is problem-free, but sometimes 401(k) accounts are misused or mismanaged.
In 2007, the U.S. Department of Labor's Employee Benefits Security Administration, or EBSA, the agency charged with enforcing 401(k) regulations, investigated more than 1,326 cases of 401(k) mismanagement or malfeasance, resulting in more than $51 million in restitution and penalties.
Experts say smoking out 401(k) shenanigans can take a certain amount of financial wherewithal. So unless you're certain something fishy is going on, you should continue making contributions into your retirement plan. But do scrutinize your statements when they come in to make sure your account is getting credited with your contributions.
