Stick to the plan! If you’ve got a 401k, especially if your investment horizon is longer than 5 years, now is not the time to get jumpy.
I just read that GM is planning to stop matching some employee contributions to their 401k plans. Add that to the fact that many 401k plans have taken a significant hit to their value lately and it is easy to get negative about the whole thing.
The 401k plan is as valuable to many working people as it was a month ago for many reasons, like these:
- Tax-favored treatment
- Company matching option (maybe)
- Easy and low cost to set up and maintain
Two problems are causing a lot of concern:
- Changes to Company Matching
- Recent, dramatic, drop in many account values
Angry that your company matching funds have been reduced or eliminated?
Compare your 401k to other investment options using these parameters:
- Safety
- Liquidity
- Rate of Return
- Choice and Control
A 401k plan with almost any level of company matching funds is attractive, at least to the level of the match.
Account lose value? Consider the cost of ‘locking in your loss’ and potential penalties before making any sudden jumps.
Stick to your plan! ….if you had a good one to begin with. No Plan? It’s probably time to have one.
