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Building up your retirement accounts takes years, but it's possible that one simple mistake could undo all that hard work. 

People often make costly mistakes without realizing it that can jeopardize their retirement and their future, and a financial planner says that some are more common than others. 

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Here are the four biggest mistakes people make with retirement accounts that do the most damage. 

1. Not taking advantage of an employer match

If you're not getting the full match in your 401(k) that you're eligible for, you're missing out on free money.

With a workplace's 401(k) program, any money you contribute can be matched up to a certain percentage of your salary. 

Daniel Czulno, a financial planner at Joule Financial and host of the DIY Money podcast, says that a match is essential if it's available. "The math says that's a 100% guaranteed return, and it's the only place you can get that," says Czulno. "If you put a dollar in, they're going to give you a dollar match, that's pretty good. You can't beat a 100% return."

If it's available to you, not taking advantage of this free money is an expensive mistake.

2. Chasing trendy investments instead of sticking to tried-and-true methods 

Czulno says that one of the expensive mistakes he's seen a lot of lately involves trying to keep up with investing trends. 

"Especially this year, we're seeing a lot of people try to figure out, 'How do I put bitcoin in my IRA?' or that next meme stock," he said. "But the math shows that, over time, you can't beat the simple, low-cost index investing." 

Index funds pull together a variety of stocks and bonds in each share, and typically have low fees. They're a favorite of financial planners, and even investing experts like Warren Buffett.

As a simple way to invest that has smaller fees attached than other securities, index funds beat the complications and volatility of trendy investments every day. 

3. Making early withdrawals from a retirement account

Taking money from a retirement account can be damaging in several ways, and can mean that you'll have a lot less money to retire with. 

Czulno says there are two reasons for this. First, "You're getting beat with income tax and penalties and so forth," he says.

The second reason is that you can't always easily replace what you take out due to limits on account contributions. "We see people take money out and then not realize that they're working against their annual maximum contribution," he says. "They'll never be able to truly replace the value that they lost there."

4. Forgetting about 401(k)s from previous jobs

Not rolling over your old 401(k) for years might sound harmless, but that's far from the truth.

Leaving an account to sit for years means that it might not be invested correctly. "We see a lot of people getting ready to retire and not realizing that their 401(k) from an employer from two decades ago is still invested aggressively and they're approaching retirement," he says.

Generally, planners recommend investing less aggressively as you age to minimize risk. "We're finding all these accounts and realizing that [being] 100% invested in stock worked for them for a decade or two, but as they approach retirement could be very costly."

If your account isn't rolled over, it's much harder to manage that money, and it might end up costing you later. Luckily, 401(k) rollovers are rather simple, and involve a few steps to move all of your workplace retirement accounts to another 401(k) or IRA that you can manage.

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Liz Knueven
Personal Finance Reporter

Liz is a reporter at Business Insider, primarily covering personal-finance topics. 

Before joining Business Insider, she wrote about financial and automotive topics as a freelancer for brands like LendingTree and Credit Karma. 

She earned her...

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