CNN Money reported last week that 43% of Americans have less than $10,000 in retirement savings, which is a statistic provided by the Employee Benefit Research Institute in their Retirement Confidence Survey (2010 results). If that figure isn’t scary enough, it appears that 27% of workers have less than $1,000. Both figures are increases from 2009, when 39% had less than $10,000 and 20% had less than $1,000 a year ago.

While the statistics are sobering, it does show how much the recession has hurt a lot of people. If you lose your job, the first thing to go after your emergency fund is probably going to be your retirement savings. Keeping a roof over your head and food in your stomach is going to take precedence over retirement tomorrow.

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A couple weeks ago I received a letter from my former employer’s 401(k) benefits company notifying me that I had $0.83 in my 401(k) account. Despite my best efforts avoid dividends and distributions on funds, I must have missed one in the process. I was told that since my vested account balance was less than $1,000, I’d have to roll it over or take a distribution, which would be taxed and penalized.

I was in a quandary. At such a small dollar amount, it certainly wasn’t worth the time to roll it over. If it appreciated at an average rate of 7% a year for forty years, it’s would be worth a mere $12.43. That’ll be enough to buy me a pack of bubble gum after taxes in 2049.

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One of the biggest challenges in almost anything you do is knowing where your blind spots are. In simpler terms, you don’t know what you don’t know.

So today, I’ll point out four money mistakes you might be making that you don’t even realize you’re making! Hopefully, you’re making none of them. If you are making one of these, don’t beat yourself over it. Now you know you’re making it and you can take steps to fix it.

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I don’t put much stock in most “averages,” whether they’re rules of thumb or average net worth, but every once and a while it’s good to know where you stand.

So where do we find the average retirement savings by age? We are forced to rely on the internet. Unfortunately, with the recent stock market crash, writing about nest eggs and average retirement savings hasn’t been very popular. To get data, we turn to the Employee Benefit Research Institute’s latest report on Individual Account Retirement Plans (August 2009).

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Editor’s Note: How many times have you opened an account and skipped over the beneficiaries section? I know I do all the time. In fact, any one who has an ING Direct account has skipped over that section because that section doesn’t exist! In this article, Jeff Rose, a CFP in Illinois, shares a chilling tale of how skipping this section could have disastrous consequences you never envisioned.

Three sons were to be equal beneficiaries from their widowed mom’s estate. She had a modest home, about $100,000 in CD’s at the local bank, and $250,000 in an annuity. The mother named the eldest son executor of the estate. The family had always gotten along and the mother never imagined there would be an issue settling her estate, especially since her wishes were spelled out in the will - each son would get an equal third.

Sounds straight-forward enough, right? Wrong.

One minor item was overlooked and it proved to be the catalyst that drove the three surviving brothers apart.

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Yesterday, my wife quit her job of nearly four years in the middle of the worst economic recession in many many decades.

Wait, that’s probably not framed in the best way. How about this:

Yesterday, my wife quit her job of nearly four years to pursue a doctorate at the University of Maryland.

Better?

Either way, neither one of us has a “traditional” job. As such, we’ve had to make a few adjustments in our life for the period between when she left her job (yesterday) and when she’ll start graduate school.

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You can avoid costly mistakes if you understand the difference between tax-advantaged investments and tax-advantaged accounts.

What are tax-advantaged investments? Investments that people make specifically because of the tax advantages they provide are referred to as tax-advantaged investments. In fact, if not for the tax advantages, most people would not buy those particular investments. Tax-free bonds, fixed and variable annuities are examples.

Mutual funds offer tax benefits but they are not generally considered tax-advantaged because people don’t buy them specifically for the tax benefits. Real estate also has tax advantages but is also not generally included in this category. What’s important to keep in mind is that these investments have tax advantages regardless of what account you hold them in.

What are tax-advantaged accounts? Retirement accounts are tax-advantaged. Examples are IRA’s, 401(k)s, SEP IRA’s, ROTH IRAs etc. What’s critical to understand is that you can buy any investment you like within these accounts and the returns are tax-advantaged. The tax benefits don’t depend on the investments you make within these accounts.

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My wife has a 401(k) with T. Rowe Price from when she used to work at L’Oreal. She never rolled it over before the economic crisis because it wasn’t a priority and there was never a huge incentive to move. The expense ratios were reasonable, there was no annual fee, and it was more important for her to focus on moving, finding a new job, and devoting her time towards that and not rolling over a 401(k), which she could do anytime.

With the stock market swinging so wildly these days, it’s risky to rollover a 401(k) because you might miss a big jump in the transition time. Since the 401(k) isn’t horrible expense-wise, we can do a little spring cleaning and wait for a better time to rollover.

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