I have a 401k program with my company & they match 60 cents on every dollar. However, I’m not sure I want to continue my savings plan at this time since all funds available are averaging -3 to -38%. I feel like I can do better investing outside despite my companies contributions in the funds that I can allocate my . What do you think???

 

  • uselessinfo06 9:00 pm on December 25, 2009

    Because of the 60 cent match the company gives you, you have an instant 60% return on your investment. That’s not something you can match anywhere else. You can technically support a 60% loss and still break even. Long term investing always pays off. Select a course your comfortable with, a decent combination of stock funds and bond funds. As you get closer to retirement make periodic changes to less stock and more bonds to protect your nest egg. You don’t want to be 55 and have a lot in stocks during a crash, but at 40, you should be able to recover such a loss. Plus the stock market "correction" only means you get more bang for your buck. You buy up more shares cheaper.

  • Tony d:-) 9:00 pm on December 25, 2009

    Usually 401k have a money market fund that does not loose money. It simply earns interest like a regular savings account. If you have that, it would be worth to put it in there and get your 60% match.
    Otherwise, there is no point contributing.

  • Buju 9:00 pm on December 25, 2009

    Stick with your company 401K, in the long run it would be worth it
    Plus if you can invest outside also do it, in conjunctionn with your 401K your maximizing your portfolio and being diversified.
    If the 401K also have a bond or income fund, they may not give big returns but they are not affected heavily by falling stock prices now.

  • cigma001 9:00 pm on December 25, 2009

    I can tell you a couple things that would be smart. First of all….it’s your retirement and the market is NOT friendly to our dollar values right now….everyone is aware of this. 1. If you company matches your contributions, take FULL advantage of it! Consider this…by contributing and receiving money from company match benefits you’re generating a 100% return on your investment. You wont be able to acheive this type of return by investing else where. 2. The SECOND you take you money out of your 401k account, you’re solidifying your losses. There are two ways to think of your investments in your 401k account. One way is the dollar value, the other is the Shares that you own. By selling the shares while the dollar value is low, you’re eliminating any chance of ever recovering the money you’ve lost. If at all possible, ride it out. Believe me, when the market turns around and those shares’s value start to double or triple…you’ll be glad you did. However if that’s not something you’re willing to do, do note that all 401k accounts have different funds that you can invest in.
    The retirement plan you are with will have other options that are not boasting negative annualized rates or returns. You ARE able to switch over to funds that are more conservative if you’re worried about preservation of capital (as all of us are).