Editing 401(k) (section)

===Risk of loss===
Unlike defined-benefit pensions (regulated by [[Employee Retirement Income Security Act|ERISA]]) or an [[FDIC]]-insured savings account at a bank, there is no government guarantee for assets held in 401(k) accounts.{{cn|date=May 2025}}

Investments in [[stock]]s can lose value due to market fluctuations. [[Diversification (finance)|Diversification]] can protect against poor performance in any one stock or industry, but not against a widespread decline like the [[Great Depression]] or [[Great Recession]]. Further diversification into [[Bond (finance)|bonds]] can protect against stock market declines, but generally have smaller earning potential and still carry the risk of bondholder default. Earners are generally advised to shift from higher-risk, higher-return assets to lower-risk assets as they near retirement age.{{cn|date=May 2025}}

Money can also be lost if the plan sponsor has financial difficulties, though if a sponsor goes bankrupt, 401(k) account holders have high priority.{{fact|date=May 2024}} Earners can take sponsor risk into account when deciding whether to leave assets in the plan sponsored by a former employer or roll over the assets to a new employer plan or to an [[individual retirement account]] (IRA).{{cn|date=May 2025}}

Fees charged by 401(k) providers can substantially reduce earnings.<ref name="mistake" />