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401(k)s Require A Steady Hand

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By STACIE SCHAIBLE

sschaible@wfla.com

Published: February 10, 2009

When did you last check the balance of your 401(k)?

Many workers have seen their 401(k)s plummet, and some have decided the best way to deal with it is not to look.

Chris Markowski, host of the radio show "The Watchdog on Wall Street," says you need to know what your 401(k) is doing, but that doesn't mean you randomly should start moving things around.

One of the worst things people do is to set up their asset allocations, then birddog the market and move in and out of mutual funds. That doesn't work. "I don't care who you are," he said.

Here are some tips from financial experts on how to help revive your 401(k):

•Keep contributing. This market decline means you'll need to save more for retirement.

•Maximize matching funds. Contribute at least enough to your 401(k) to get your employer's matching contribution. It's free money.

•Assess your timetable. Determine how long it will be before you need your retirement money. The more time you have, the better chance you will have of recouping losses.

•Seek advice. Many workers aren't making good investment choices on their own. If your company doesn't offer help with 401(k) allocations, it might pay to find a certified financial planner in your area.

When it comes to your 401(k), there's no need to be superaggressive, Markowski said.

"One of the big myths out there that I always try to explain to people, especially if they're younger, they make the mistake of getting superaggressive in their 401(k)," he said.

The key is to start young, keep feeding the account and never touch it.

"If you just see a 6, 7, 8 percent return on average, you're going to be rich anyway," he said. Why speculate with it? ... That's a mistake a lot of people make.

"Because you have time on your side, a conservative return over time will do fantastic for you," Markowski said.

Reporter Stacie Schaible can be reached at (813) 225-2739.

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