Frugal Friday tip on 401(k)

By Gerri Willis - bio

NEW YORK (CNN) - The Frugal Friday tip of the week is all about your 401(k). Retirement may seem like a fantasy if you watched your 401(k) crater over the last year, but don't throw in the towel. If you haven't looked at your 401(k) balance already, do so now.

Here are some 401(k) do's:

Keep investing - Even if your employer has cut your 401(k) match, you'll want to keep putting money away for retirement. In fact, in that case, you'd want to set even more money.
Get diversified - Keep in mind that 401(k) investing doesn't just mean stock investing. It means a balanced portfolio of stocks and bonds.
Fix the mix - Most of us have seen the portion of our portfolio dedicated to stocks tank. You'll want to deepen your contributions to stocks to make up the difference.

Remember, asset allocation is key to return over the long run, but there are a few things to avoid as well. Don't tap your 401(k) for non-emergencies. The costs of using your retirement money before retirement are excessive. If you're less than 59.5 years old and you take a hardship withdrawal, you will pay a 10% penalty. Plus, you'll pay income tax on what you took out. Don't leave your 401(k) money behind. If you're laid off or you leave the company, it makes sense to roll your money over to an IRA. Not only are you more likely to have better investment options, but you'll have more control over your money.

Don't lose heart, you can and you will retire. There are lots of ways to "make it." in addition to social security and your retirement savings, you may also consult or do special projects. You may get some help from the kids.

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