The bad news is in the mail for many of us -- in the form of retirement account statements about the just-concluded quarter.
Falling stock prices have been taking 401k and IRA bottom lines along with them.
But The Early Show's financial guru, Ray Martin, says you needn't panic.
He shared some advice Tuesday.
SHOULD YOU TAKE YOUR MONEY OUT OF YOUR 401k AND INVEST IT ELSEWHERE?
Staying the course, keeping your 401k is not a bad thing. The matching aspect is an incentive.
And, "You could lose 40-to-50 percent of their value just in income taxes and penalties" on withdrawals, Martin told substitute co-anchor Lara Spencer.
WHAT CAN I DO TO PROTECT MY 401K MONEY?
You should customize your plan and make smart choices. In some cases, 401k plans are one-size-fits-all -- your employer picks a mix of stocks and other vehicles for your money to be invested in. But six-out-of-ten plans offer brokerage options, allowing you to call a broker and transfer your money out of bad stocks and place it in promising sectors, such as green energy. If your plan has this option, this is the time to pick up the phone and take advantage of investing advice.
But remember, Martin stressed, "You will have down cycles but, in five of the last six periods of time where the market has fallen for five months or more, we've had significant gains a year later; sometimes those gains were as much as 30 percent."
SHOULD I NOW BE WORRIED ABOUT MY RETIREMENT?
There is no doubt that times have changed. Retirees-to-be can't rely on just their 401ks and think they will be OK. They won't. Because of the rising cost of living, current retirees are struggling to make ends meet, and some are even going back to work. If you want to be safe, you need to pack away 10 to 15 per cent of your income. This extra investment is what could guarantee you a safe and worry-free retirement.
HOW COULD I GO ABOUT CHANGING THE MIX IN MY 401k?
"Most 401k plans today have call centers," Martin points out, "where you can ask to speak to a representative who is hired by your plan and is objective, (and who is) on salary. They're not trying to sell you a product. They can walk through all the options in your 401k, how it works, and give you investment advice on how to allocate it, as well.
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