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401(k)

How can I rebuild my 401(k)?

As a matter of arithmetic, there are only three ways: work longer, save more, and get high returns.

If you are within 10 years of retirement and had your 401(k) money in anything but the most conservative funds, you’re almost certainly going to have to delay retirement. Each year you work provides another year of savings; it’s also another year that you don’t have to draw from your 401(k), which may mean you don’t need as much as you thought.

You’ll also need to save more. To recoup a 50 percent loss in your 401(k), you need to increase your account by 100 percent. Unless you’re willing to wait for the market to double from today’s level, you’ll have to shovel in fresh money of your own.

The other way to recover from your losses is to earn high returns — that means investments that carry some risk, including stocks. But there is one low-risk, high-return incentive available from your 401(k), and that’s your company’s matching contribution. An employer that kicks in 50 cents for every dollar you save is handing you a 50 percent return on your investment, so be sure to save at least enough to get all you’re entitled of your company’s match. To dig out of the hole created by this market, you’ll need all the help you can get.

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  • Morningstar Expert: Investing Help for Your 401(k)

    In her new book, 30-Minute Money Solutions, Morningstar's Christine Benz offers a simple three-step plan for investing in your 401(k) plan. The first thing you need to decide is how much control you want over your retirement portfolio. by Christine Benz

    Articles | Feb 8, 2010

  • More Proof Pensions Better than 401(k)s

    Old fashioned pension plans outperform 401(k) plans by an average of one percentage point a year. That adds up to a huge difference in the potential nest egg you'll have 20 or 30 years down the line. Since you can't go out and buy yourself a pension, your next best move is to understand what...

    Blog posts | Feb 9, 2010

  • How Good Is Your 401(k)?

    Christine Benz, author of "30-Minute Money Solutions," tells Jill Schlesinger how to spot a bad 401(k) - and what to do if your company plan is not up to par.

    Videos | Feb 3, 2010

  • Avoid These Top 10 Retirement Planning Mistakes

    By planning ahead, you can avoid these Top 10 Retirement Planning Mistakes. This will help prevent running out of money in your 70s or 80s, when you might still have some good years ahead of you. by Steve Vernon

    Blog posts | Feb 5, 2010

  • Best 401(k) Moves When You Leave a Job

    Leaving a company means you need to decide what to do with your 401(k) savings ? and the right answer is worth tens of thousands of dollars. These seven rules will help you minimize your taxes and maximize your nest egg. 1. Do Not Cash Out Nearly half of employees cash out their 401(k)...

    Articles | Nov 24, 2009

  • 401(k) Problem: Could You Live on $3,100 a Year?

    A new industry-backed study says people are happy with their 401(k) accounts. But the average retirement account holds only enough money to provide retirees with $3,100 a year in income. That's not enough.

    Videos | Jan 27, 2010

  • Obama Middle Class Task Force Falls Short on 401(k)s

    The Obama Administration's Middle Class Task Force includes initiatives to help American's do a better job saving for retirement. There's plenty to applaud, but one major oversight, as well. by Carla Fried

    Blog posts | Jan 28, 2010

  • Survey or No Survey, the 401(k) Still Needs a Fix

    A recent survey by the mutual fund lobbying group tries to suggest that all is well with the de facto national retirement plan, the 401(k). Not true. by Eric Schurenberg

    Blog posts | Jan 11, 2010

  • How Mayor Bloomberg & the Starbucks Effect Could Rescue your Retirement

    Starbucks customers in New York City have reduced the calorie-count of their food purchases by an average of 6 percent since the city started requiring restaurants to post calorie information next to its products. Customers with a history of ordering high-calorie food reduced their calorie count...

    Blog posts | Jan 26, 2010

  • Update: 401(k) Auto Enrollment Not Shrinking Matches

    New research from the Employee Benefit Research Institute contradicts an earlier report (from the Urban Institute) that suggested the rising popularity of auto enrollment was causing firms to reduce their matching contribution rate. In fact, EBRI says on average, the large firms it surveyed have...

    Blog posts | Jan 21, 2010

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