(WTOL) - Wildly swinging stock prices have most of us nervous -- some of us despairing -- about the retirement money we've put into our 401k accounts. Should we pull the plug on our contributions?
These days, most of us would be thrilled to hear 5 or 6 percent on our money. What if someone offered you a guaranteed 50% return? Its no scam, and its legal.
John Matarese tells us why many people turn it down in this Call 11 for Action alert.
Many of us have watched our retirement funds decline 25% or more this past year. It's tempting to stop investing. But wait. If your company matches your contribution, you will be giving up free money, and the best return you can get right now.
Yes, a company match on your 401k is an immediate return of 50%. Many companies will give you 50 cents for each $1 you contribute, which is an instant return of 50%. If they match $1 for every dollar you put in, that's a 100% return on your investment.
My advice? Most financial experts suggest you contribute the maximum to your 401k that will get company matching money, usually 5 or 6 percent of your salary.
Doesn't that Stink?
But from the 'Doesn't that stink file?', the growing number of employers that are now suspending matching 401k contributions. General Motors has just announced no more matching money for its 401k plans.
The Wall Street Journal says other troubled companies are likely to follow GM's lead. The journal says when companies stop contributing to 401ks, employees often stop contributing, which in the long run is usually a very bad idea.