A 401(k) plan lets employees set aside a specific sum from their monthly paychecks and invest it in a special retirement savings account. Opting for this plan has several benefits. For example, one can choose from two types of 401(k) accounts (each with unique features) and avoid paying taxes on the money invested. Still, for a 401(k) plan to work effectively, one must  steer clear of  a few common errors. Not investing enough Individuals should regularly invest money in the 401(k) plan during their employment tenure to enjoy a good return after retirement. Not contributing to the account frequently, contributing a low amount, or not increasing the contribution to this account over time as one’s salary increases are all factors that may affect the plan. Individuals should note that they could invest around $22,500 in the 401(k) in a particular year while increasing the sum by $500 the following year. Those over 50 could put away an additional amount. Some plans enable users to automatically increase their contributions by 1% annually at a date of their choosing, which is highly beneficial.  But  one should note that the automated annual increase will stop once it touches 10%, or 15% in some cases. Making a job switch before the vesting period Most employers offer to match the employee’s payment to the 401(k) plan every month or at least make some contribution from their pocket.