Here's What Retirees Wish They Had Done Differently With Their 401(k)s

You hear it over and over again: A 401(k) is one of your best retirement savings tools. What that statement leaves out is that its value depends in part on how skilled you are at using it. That doesn't mean you need to become an expert in all -- or any -- stocks to be able to build a comfortable nest egg with your 401(k).

However, you need to understand the basics of how they work and the biggest mistakes to avoid. Here are some of the most costly 401(k) errors seniors tend to regret.

Image source: Getty Images.

They wish they'd started saving earlier

One of the biggest regrets seniors have is that they waited, sometimes until the middle of their careers, to start saving for retirement. This is often driven by financial necessity. They simply couldn't afford to save for retirement earlier, with small salaries and more pressing financial concerns. It can also happen because they felt they could only spare an inconsequential amount per paycheck.

What many don't realize until much later is that your earliest dollars are often your most valuable because they have the most time to grow. If you invested $20 a week for 40 years and you earned an 8% average annual return, you'd have more than $70,000, despite contributing just $9,600 of your own money. Obviously, that's not enough to retire on, but it illustrates that even small contributions add up over long time spans.

They wish they'd contributed more each year

Many seniors underestimate how much retirement will cost, or overestimate how much they'll get from Social Security or how quickly their investments will grow. They wind up contributing less than they need, even if they could afford to save more.

Everyone's retirement plan will look different depending on their life expectancy and goals. If you haven't already, take some time to figure out how much you need to save for retirement. Then start building a savings plan around that, rather than guessing or choosing an arbitrary benchmark, like $1 million.

They wish they hadn't left any of their 401(k) match on the table

Consistently claiming your full 401(k) match can drastically increase your retirement readiness. What might be a few hundred or a few thousand dollars today can easily become tens of thousands of dollars after it's invested for a few decades.

Some people genuinely can't afford to claim their full 401(k) match because they need all their income for living expenses. But if you can spare the cash, put it into your 401(k) first until you've claimed the entire amount. After that, you can explore other retirement accounts if you don't like your 401(k).

If you have any questions about how your plan or your employer's matching formula works, reach out to your HR department or plan administrator to learn more. Asking questions now could save you from some major headaches down the road.

The Motley Fool has a disclosure policy.