The 401(k) is a financial took to help you save for retirement but just like any tool, it is only as efficient as the operator. How much do you really know about your 401(k)? If you’re like most, you were handed a packet from your employer and told to pick the funds based on the information found in the difficult to read prospectuses or you were told to check the box that would allocate your money how the company sees fit.

It’s not your fault. Employees are led to believe that throwing money at their 401(k) will ensure a suitable amount of money at retirement but that isn’t always true. These few tips may help you to make your 401(k) more efficient.

Don’t Overdo It

Like anything else, too much of any one thing is rarely a good idea and that’s true of your 401(k). It’s best to contribute the maximum amount up to the amount that your employee will match but not much more. 401(k)s are often full of high fee mutual fund choices that could severely degrade your available funds after decades of saving.

Instead, consider opening an IRA where you or a trusted financial professional have more choices of how that money will be put to work.

Don’t Think Micro

You’ve heard of diversifying but some people with numerous retirement accounts mistakenly believe that diversifying applies to each account. Instead, diversify all of your accounts as if they were one. Your IRA may hold your bonds which are usually tax at ordinary income tax rates and your brokerage account may hold stocks since you’ll probably hold them for a long period of time which triggers no tax until you sell.

Speaking of Multiple Accounts

If you have multiple retirement accounts from different employers, consolidation may be well advised. Not only is one or two accounts much easier to manage than multiple, small accounts, pooling the money may open up more options for how the money is invested. Consider consolidating multiple accounts in to one IRA. There are no tax penalties providing all of the money goes directly to your new IRA.

Waiting too Long to Get Paid

It may seem like a long way off right now but once you reach 70 ½ you have to start taking money from your 401(k). Depending on the size of your balance, you may end up in a higher tax bracket if you take a large amount from your 401(k) along with other sources of income like social security. Start taking money from your 401(k) as early as 59 ½ to avoid the tax consequences. A trusted financial planner can help you decide when to start taking distributions to avoid the tax penalties.

Not Staying Disciplined

If you’re young and haven’t seriously thought about retirement, the time is now. Contributing a small amount to your 401(k) today while receiving the company match will turn in to a lot of money once it has compounded for decades. Retirement will sneak up on you faster than you think.

Get Help

Retirement planning is complicated and you only have one chance to save for your later years. This is one time where the do-it-yourself investor should get help from a financial planner. While it’s true that there are some planners who give the field a bad name, there are many more who will help you to maximize your contributions and retire with security. Regardless of your age, now is the time to get on the right path.