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Your Retirement Investments - Don't Be Chicken Little!

Your Retirement Investments - Don't Be Chicken Little!

Jennifer Gniadecki (@JennyDecki on twitter) shares her nasty paperwork tips with Mom It Forward readers today. She blogs at Beyond Mom, pays the bills as a freelance corporate writer, and is a fanatical budget junkie.


PhotobucketFinances are a popular topic these days (since everyone's seem to be in the toilet) but talking about financial security and the road to a frugal life is like being given a map - when the map doesn't have a handy You Are Here marker. You have to know where you are to plan where you are going - if you want to get there.

If you have an IRA, Roth IRA, or 401(k) that you have been avoiding because you are afraid to see how much money you've lost, now is the time to put on your big-girl panties and take a look. Take a look in your files (or in that one drawer where you stuff things if you're like Becky Bloomberg from the book Confessions of a Shopaholic) and get out your family's retirement investment statements.

How Much Do You Have - How Much Did You Lose?

First thing, check how much money has been invested into your plan. Write it down. Now write down how much is in there today. Do a little fancy math and turn that scary dollar amount into a percentage. We're going to use this number in the next section to see if you need to move your investment or stay put!

Where Is Your Money - How Is That Working Out For You?

  • Write down the names of the mutual funds you are invested in through your 401(k) or IRA. Call the 800 number on your forms and ask customer service to send out a Prospectus for each mutual fund you are in. That Prospectus is going to give you information on the mutual fund, but more importantly, it will give you return values over time. That means if your fund has been around 25 years, you can see how it has fared since 1983, and will be a much more reliable indicator of how well it's going to do over the next ten years. In most cases, this will be a really comforting number, because you can see that over 25 years your investment won't be in the crapper anymore.
  • If you have a 401(k) you may be able to get the Prospectus directly from your HR department. If not, ask HR how to get a copy of the Prospectus for your mutual fund or stock holdings.
  • If the overall return is not good for the last 25+ years, consider moving to another mutual fund. That means going through a few more Prospectuses. Also, you can track most investment statement type plans for free on mint.com. Your HR department or customer service might act a little put out, but to heck with them, this is your money, your future, and your retirement. Do it.

Does Your Employer Offer Matching - Take Advantage of It!

PhotobucketIf you have a 401(k) and have not been putting deposits in up to the point your employer will match - now is the time to change that. The economy is a cycle, and we're at a low point. That means it's going to go up eventually and you want to buy low and sell high. Now is the buying low portion of the program!

Chicken Little Was A Chicken - Your Brain Is Ten Times Bigger!

That is my super-upbeat-tough-love way of saying, "Stop thinking the sky is falling! It's not!" Don't think I'm sugar-coating here. My husband was laid off in December and we're in the same boat as millions of Americans (heck, millions of humans all over the world - it's not just bad here) - but because we have a budget and know what's going on in our investment portfolio (because if you have an IRA or 401(k) you have an investment portfolio) we know to the penny how much money we need to make in a month to survive, and the excess goes into savings.

When you don't pay attention, it does feel like the sky is falling.
Take control, and everything will be a lot less scary!



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