The bailout package has been passed for a week now, but the stock markets are still taking a beating. Investors are nervous, and rightly so. Those of us who have our retirement money in 401(k), plans, or any other plan that invests in stocks have seen our accounts dwindle. I personally have lost over 25% of my retirement account in the past year alone because of the stock market. Most of us are wondering if we should just switch over to a nice, save interest-bearing account until the markets stabilize. Here are some tips to help see you through.



1) DON'T PANIC! That's a hard pill to swallow amidst the panic that is here already, but this is sound advice. By panicking, you will be quick to make a decision without thinking through the long-term consequences.

2) Talk with your financial advisor. This is important because, beside you, your financial advisor knows more about your finances than anyone else. He/she can help you redesign your portfolio to still be able to achieve your retirement goals. Together, you will be able to redistribute into some lower-risk stocks, and maybe move some to interest accounts.

3) Change your contribution level. If you are participating in an employer-sponsored 401(k) or other such pre-tax plan, consider raising the amount you are contributing. In a lot of cases, you will not see a significant difference in the amount you are bringing home because the more you contribute, the less you will pay taxes on. If you are not yet at the maximum amount for employer-match, consider raising to at least that amount. No sense in letting money stay on the table.

4) Don't try to follow the market. The way most of these plans work is that they are constantly selling and re-buying in order to maximize shares. By changing your allocations constantly, you don't give these plans a chance to work like they are supposed to. Be patient and refer to rule #1.

5) Don't withdraw early. Withdrawing before you are of age without an acceptable reason will cause you to lose 30% of your money, unless you move it to another approved account within the allowed time frame. Unless it is a direct rollover, you will still be subject to 20% withholding, but some, if not all, of that may be recouped at tax time.

I am leaving my money in the stock profile it has been in because I believe the economy will bounce back like gangbusters. I fully expect the 25% loss to be replaced by a 50% gain in the next year. That is a risk that I am willing to take on advice from MY advisor.

Please seek the advice of YOUR financial advisor before making any changes to your retirement plan. This is your future and you need to be as sure as you can that it is protected.