6 ways to get your 401(k) back on track
If your retirement accounts are feeling the pain of the recession CNNMoney lists some dos and don’ts.
1. Continue investing
2. Diversify your portfolio
3. Rebalance your portfolio
4. Don’t tap your retirement account for non-emergencies
5. If you leave your job (or are laid off) roll your 401/403 account into an IRA
6. Don’t give up
My take:
- Definitely continue. And if you aren’t a regular investor, now is a great time to start. Stocks are at a premium.
- Diversification is important to minimize risk. That means investing in US stocks, US bonds, foreign stocks and maybe even a couple of commodities and cash.
- Given how big a hit stocks took, it is wise to shift some money out of bonds and into stocks to put your get your investments back into balance.
- Yet another reason to have an emergency fund. Tapping that retirement account will cost you dearly in penalties. Just don’t do it.
- Don’t cash out your 401 and don’t leave it sit there. Get it moved into an IRA account. If you aren’t happy with the investment companies that your 401 is with, find a new one and move it.
- Never give up. There are options. The market will rise again. Social Security is still paying out. You could find ways to make extra money on the side. Your kids might even be able to help you out.
