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Surviving a 401(k) freak out

Question: My 401(k) is invested entirely in stocks and has dropped 30% over the last two months. Should I move my account out of stocks now, or should I wait for my account balance to go back up and then move it into bonds until the market stabilizes? I'm afraid I'm going to lose even more. Help! —Leslie, Fairfield, Connecticut

Answer: It's natural in uncertain times like these with financial markets MORE

Sizing up 'safe harbor' money markets

Question: I've been hearing a lot of talk of late about the safety of money market accounts, so I'm wondering if the money I have in a money market account with my bank is secure. Is it? —M.S., Atlanta, Georgia

Answer: I think your worries may stem from the possibility that that you're confusing two types of savings vehicles with similar names. I'm talking, of course, about bank money market accounts MORE

How bank failure affects your savings rate

Question: Can the rate you're getting on CDs be lowered if your bank fails and your CD is transferred to another bank? I have a Washington Mutual CD that pays 5% and matures in September 2009 and I'm wondering whether I will continue to earn that rate now that WaMu has failed and JP Morgan Chase has acquired its deposits. If that's not the case, what can I do? —Katherine, MORE

Your 401(k): A vested interest

Question: My company's 401(k) vesting period is longer than I plan to stay at my job. Should I still invest in my 401(k) knowing that I will not receive any employer matching?
- Andrew, West Palm Beach, Florida

Answer: The short one is, Yes, you should still contribute to your 401(k) account even if there's the chance that you may not get your employer's matching funds.

But before I get into the reasons MORE

Don't let the crisis spook your 401(k)

Question: I'm 20 years old and have just started a new job. For the first time I now have the opportunity to participate in a 401(k). But with all that's been going on lately, I wonder whether I should hold off signing up until things get better. What do you think? - Sarah, Las Vegas, Nevada

Answer: I don't blame you for feeling apprehensive - or flat out scared, for that MORE

Protecting your money: Mutual funds and brokerages

This is the second part of a two-part story on safeguarding your investments in a market crisis. Read Part 1: Banks and Insurance.

MUTUAL FUNDS: (including money-market funds): No fund company has joined the growing list of financial institutions reeling from losses or requiring a bailout (at least not yet). But based on emails I've gotten recently, some individual investors still wonder whether they could lose any of the money they MORE

Protecting your money: Banks and insurance

Given all that's been going on in the financial markets lately, it's no surprise that I've gotten lots of queries from people who are worried about what might happen to their investments and retirement savings should a financial firm they do business with go belly up.

Which is totally understandable. These are scary times, what with the collapse of Bear Stearns and Lehman, the sale of Merrill MORE

Retirement saving is no gamble

Question: I'm a 50-year-old woman who has yet to set up any retirement fund. I have $5,000 that I can invest now to get started, and I may be able to invest another $1,000 to $2,000 every quarter. But I wonder whether this is just a high-risk gamble considering that I have such a short time until retirement. Besides, I'm not even sure where to put the money if I MORE

The IRA loophole you don't want to miss

Question: My wife and I contribute to Roth IRA accounts and we hope to retire around age 50. But next year our income will put us over the Roth IRA income limits, so we won't be able to contribute anymore. So should we just put money in a traditional IRA at that point, a taxable account or, since we have enough income, both?  —Dave, Castle Rock, Colorado

Answer: I've got some MORE

A late start on retirement saving

Question: I'm 42 and would like to start investing for retirement through my retirement savings plan at work, which offers an employer match. What's the best strategy at my age? -Missy, Atlanta, Georgia

Answer: So you want to make sure you're investing appropriately in your retirement savings plan. Wise decision. You'll have a much better shot at a secure retirement if you follow an actual investing strategy as opposed to just MORE

Should we manage our daughter's money?

You can't protect your kids from making financial mistakes, but you can provide them with the tools to learn fiscal responsibility on their own.

Question: My 20-year-old daughter works two jobs and is going back to school part-time. Her father takes her paychecks and doles out money to her as needed. He thinks he's helping her by doing this, but I think he's hurting her. I worry that if she MORE

How your 401(k) stacks up

If your 401(k) is really full of losers, then you might consider dumping it for an IRA. But do a status check first.

Question: I'm already putting enough in my 401(k) to get the maximum company match, but I'm thinking about contributing more. I suspect, however, that the funds in my 401(k) are not top performers. Would I be better off instead putting my extra savings into a traditional MORE

Debunking the 'urban myth' of rebalancing

Leaving your portfolio to fend for itself could end up exposing you to more risk than you're willing to take.

Question: If my portfolio is built around a solid asset allocation model based on decades of relative performance between different asset classes, why should I rebalance every quarter or year, as is often recommended? Won't the long-term market results naturally rebalance the portfolio for me? Besides, won't rebalancing reduce my MORE

How foreign stocks fit into your portfolio

International stocks should be a part of any diversified portfolio, but they're not a shelter against domestic rough spots.

Question: Given the way the U.S. stock market has been behaving, what are your thoughts of buying foreign stocks versus domestic shares? —Henry, San Antonio, Texas

Answer: If you're thinking of moving into foreign stocks because they'll offer shelter at a time when U.S. shares are being hammered, you may end up MORE

Too young to save, too afraid not to

It's never too early to start putting money away for retirement, but that can be tough for a young person with a tight budget and a lot of pressure to spend.

Question: I just turned 24, and the constant pressure from financial advisers to "save save save" for retirement makes me anxious that I'll never be able to retire. I contribute 10% of my salary to my 401(k) each year - MORE