Not contributing to a 401(k) was voted as the worst financial mistake made by Americans.

If you cant remember making a financial mistake then it might be time to get your memory checked. While no one is immune to making inopportune financial decisions, some missteps are a lot more costly than others.

Some mistakes are nearly unavoidable. Think about the Americans who purchased homes at the height of the real estate market boom that preceded the Great Recession. Few people anticipated the financial markets to collapse the way they did in 2008.

However, the mistake most Americans are afraid of making is usually self-inflicted and easily avoidable.

According to a survey by TD Ameritrade, Americans believe that not investing in a 401(k) is the worst financial mistake you can make. Not having an emergency fund was voted number two, while not contributing enough to a 401(k) to get the company match came in at number three.

If one thing is clear, its the importance of the 401(k) in modern retirement planning. Heres what you can do to make sure you take full advantage of your employer-sponsored retirement plan.

But first, lets review what a 401(k) and why its so important.

Lets get started.

Earlier this month, GE announced that it was freezing the pensions of 20,000 employees. As if we needed it, its the latest sign that pension plans are heading toward extinction. Once seen as the Holy Grail of saving for retirement, the pension has been virtually replaced by 401(k) plans.

A 401(k) is an employer-sponsored tax-favored retirement account that you contribute pre-tax wages into. At its most basic level, a 401k is simply an account that you use to save and invest for retirement.

Unlike pensions, you, as the worker, are the steward of your 401(k) investments and contributions. This means that if you dont opt-into a 401(k) plan, you wont be making regular retirement contributions via payroll deductions. In a pension plan, the employees dont participate in the management of those funds.

For many, seeing payroll deductions for social security provides a false sense of relief. In truth, if you are relying on social security to bail you out, youll likely be left wanting more.

The average social security benefit for retired workers in January 2019 was $1,461. For an aged couple both receiving benefits, the figure jumps to $2,448. On an annual basis, thats $17,532 for an individual and $29,376 for a couple.

When you consider that the average household spends $660.25 per month on food alone, it goes without saying that relying solely on social security during retirement will strain most American budgets. Add in the fact that healthcare expenses in retirement are significant, and this leaves very little money, if any, leftover. Definitely not enough for the retirement most people envision, which includes ample travel.

When it comes to your retirement, its important to get a sense for how much you should aim to save on a monthly basis. Use this retirement calculator to get an estimate for your monthly savings goal.

The best thing you can do for your 401(k) is to invest as much as you can. For 2019, employees can contribute up to $19,000. Employees at least 50 years old are eligible for a catch-up contribution of $6,000. Employers can also contribute to employee 401(k) accounts, but there's a $56,000 limit on combined employer and employee contributions. The number jumps to $62,000 if the employee is eligible for a catch-up contribution.

If you arent able to contribute enough to max out your 401(k), always aim to at least contribute enough to get the full company match. Not getting the company match is a big blunder youll want to avoid at all costs.

Once youve elected your contribution amounts, its time to think about your investments. The worlds best money managers recommend investing in a diverse basket of stocks and bonds. Index funds or target date funds are the easiest way to do this, while also keeping fees at a minimum. However, not all index funds are created equal. Last year, Fidelity launched a new index fund with zero fees. The response from Vanguard and other brokerages has been to lower their fees as well. This means there are more low cost investment options than ever.

One hiccup is that your 401(k) plan may not have those low cost funds available. While you are employed at the company and are required to select from pre-selected options, pay close attention to the fees, typically expressed as expense ratios, that different funds charge. Higher fees typically means less money in your pocket. If you switch jobs or leave your employer, make sure you roll your 401(k) into an IRA so that you have complete control over your investment options.

If you want to supercharge your retirement savings, contribute to an IRA or Roth IRA in addition to your 401(k). In total, aim to save and invest 15% of your lifetime earnings in order to have a that retirement youve always wanted.

You owe it to yourself.

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This Is The Biggest Retirement Mistake Americans Are Afraid Of - Forbes