Why is loading up on my own company's stock in my 401(k) risky?

Concentrating your retirement savings in employer stock doubles your exposure to a single company — and that's the danger. If your employer hits hard times, you can lose both your paycheck and a big chunk of your nest egg at the same time, exactly what happened to employees in famous corporate collapses. Diversification is the core defense against this; spreading money across many companies and asset classes means no single failure wrecks you. A common guideline is to keep any single stock, including your employer's, under 10% of your portfolio. If matching contributions or an ESPP keep funneling you company shares, periodically sell some and reinvest in diversified index funds — mindful of taxes and any holding requirements. The exception worth checking is the NUA tax strategy for highly appreciated shares. Review your concentration at wealthserene.com/tools/net-worth.