Sunday, December 21, 2008

Step Away From The Statement

The New York Times today has a story about something I touched on earlier in the week - that more companies are cutting back or eliminating their matching payments for 401(k) plans. When Forbes compiles its list of the 100 best companies to work for list, I hope these fine corporate citizens get passed over, but that's a topic for another day.

If your company is shifting even more of the responsibility for you retirement income to you, what should you do? The market is down by more than 1/3. Your 401(k) balance is bound to be smaller than it was. You can't fix it overnight but don't compound the situation by making mistakes.

  • Do not stop making contributions. By contributing now, you are paying much less for the same investments than you were months ago. Deal.

  • Question your allocations but don't get too conservative, unless you are very near retirement.

  • Have a pro take a look. At some point, hopefully now, your 401(k) could be your biggest asset. Don't just wing it.

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