UPDATE THE MIX IN YOUR 401(K)

The price of stocks moves up and down as business and economic conditions change. Over the course of time, the mix of investments you originally selected may change and this could affect the chances of meeting your retirement savings goals.

For example, let's say that you invested 50% in stocks and 50% in bonds. A couple of years later, your mix could have shifted to 32% stocks and 68% bonds because of declines in the stock market. You may want to return to your original mix or you may want to mix it up differently. We recommend that you review your current mix to determine if you need updates at least once a year.

Once again, you will consider how much risk you can tolerate, how long it will be until you retire, and your financial goals. Generally, the longer you have until you retire, the more risk you can assume. Normally, this translates into a larger percentage of your savings going into stocks. As you move closer to retirement, you may want to shift toward a more conservative mix featuring more bonds and money market instruments.

In addition to checking the mix of asset types (stocks, bond, and money market instruments), you will also want to check if your portfolio is dominated by a particular stock type or size (growth vs. value stocks and large cap vs. small cap stocks). Once you understand your current mix of investments, then you can determine if updates are needed.

Remember, you're not alone.

If you don't have the time or desire to follow market trends to re-evaluate the investment mix in your portfolio regularly, consider meeting with one of our financial advisors annually to review the investment mix in your retirement portfolio and discuss changes that need to be made to it.

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