Many people set up automated contributions to their 401(k) or IRA but fail the crucial second step: choosing an investment. Their money then sits idle in a low-yield money market fund, earning almost nothing and negating decades of potential compound growth.

The temptation to switch to a shiny new opportunity ignores the significant head start you've built. Even if the new venture grows faster initially, you lose years of compounded knowledge and progress, leaving you behind where you would have been by sticking with it.

To drive adoption, changing the default from opt-in to opt-out is far more effective than simply reducing friction. When a company automatically enrolled new employees into a 401(k) plan, participation jumped from 50% to 90%, demonstrating the immense power of status quo bias.

The conventional wisdom to always max out a 401(k) is questionable. After fees, the net benefit over a taxable brokerage account can be as low as 40 basis points per year. For high earners or those aiming for early retirement, this small advantage may not justify locking up capital until age 59.5, sacrificing valuable liquidity and flexibility.

Companies now auto-enroll employees in 401(k)s at a low 3% savings rate. While seemingly helpful, this is a trap. The rate is insufficient for retirement and gives employees a false sense of security, preventing them from saving the truly necessary 12-14%.

Benefits programs are often designed for a generic employee persona. However, an individual's needs are dynamic, changing with life events like having children or caring for aging parents. A benefit that's useful one year may be irrelevant the next. The only scalable solution is to provide choice that adapts with the employee.

While DC plans receive huge inflows, a large portion of assets leaks out annually into rollover IRAs as employees change jobs. This dynamic means the net growth of the captive 401(k) asset pool is less explosive than top-line numbers suggest, tempering the "flood of capital" narrative for private markets.

The long-held belief that frequently changing jobs is a red flag on a resume was promoted by companies to maintain employee loyalty. Modern employers should be more empathetic and understand that people often need to explore different roles and industries to find the right career fit.

The allure of a "better" opportunity is deceptive. By switching, you abandon years of accumulated experience and momentum. Growth is easier when you're established, meaning a new venture, even if growing faster initially, will likely never catch up to your existing trajectory.