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Work on your 401(k) in ’09

You cannot listen to the radio, switch on the TV or go online without getting miserable these days. You continually hear about how bad your 401(k) retirement account has been hit by the recession. I spoke with financial advisers in Queens about what can be done to stop the bleeding.

The general consensus was that you should earn more money on your investments or save more money. To be blunt, though, earning more money is not occurring right now. So what do you do to help your 401(k) losses?

Do not give up on the stock market. Despite the Wall Street meltdown, stocks are still the best overall money−makers over time and have the ability to make substantial gains, which in turn could help bring you closer to whole and⁄or in a profit zone in a shorter period of time. In 2009, look to fine−tune your investment mix.

Sit with your financial adviser and review what bargains are out there and what can be done to shake up a mundane retirement portfolio. Do not overdose on company stock. Your money is only as good as a company’s financial strength. In these tough financial times, no company is a sure thing.

Try and reduce your investment expenses. If you cut your fees by one percentage point, you add one point to your results. Keeping costs low, however, can be difficult to do, since not all 401(k) fees are fully disclosed. In the meantime, reduce your expenses by sticking with low−cost funds. Most 401(k) plans offer one or two index funds, which charge “inexpensive” fees. You may also have access to institutional funds, which tend to run lean, too.

So How’s Business regarding helping your 401(k) losses? You can only control how much you put into your 401(k) plan, but sometimes the little things can help you save a couple of bucks, which ultimately pays off over time. I am making it a point to thoroughly review my retirement plan because there is going to be a lot in the way of investment opportunity in 2009.

Reach Joe Palumbo at 516−248−0256 or

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