For thousands of Americans, the current economic crisis has taken a toll on carefully laid retirement plans.
Now many are wondering what they should do with their money -- especially their 401(k)s. To answer their questions, "Good Morning America" invited three financial experts to appear on the show today and give their opinions on the best course of action to take.
Ron Leiber is the "Your Money" columnist for the New York Times and the author of three books, including the Times best-seller "Taking Time Off."
Laura Rowley is a columnist for Yahoo! Finance and Dayana Yochim is a personal finance advisor at The Motley Fool.
Ron Leiber: Definitely do not stop contributing.
"As far as the allocation goes, if you move away from stocks right now, you run the risk of essentially selling at the bottom or close to it. You may not have the courage to move back into stocks until the stocks have already run back up again."
Laura Rowley and Dayana Yochim: It depends on debt, job security and retirement timing.
Rowley: "The one thing you have to analyze is 'Do I have an emergency fund -- three to six months' worth of living expenses?' Maybe you can contribute to a 401(k) to get a match that's offered, but pay off high-interest debts also."
Yochim: "For people close to retirement... you may want to take enough money out of the market for the next five to ten years with the low-risk tolerance. But the thing about the 401(k) is that you're putting money away that is pre-taxed. Also, with an employer match, you're getting free money which is hard to come by. If you're nearing retirement, remember, you could have 20 or 30 years left to live, and you want to let compound interest be on your side. You want your money to continue to grow."
Dayana Yochim: Yes, at least until December 2009, when the $250,000 insured limit may revert back to $100,000.
"The money in the bank is insured up to $250,000 instead of the normal $100,000. For some retirement accounts, the coverage limit is $250,000 the entire time."
Ron Leiber and Laura Rowley: It depends on the size of your account.
Leiber: "You have to be worried about the limits. If this is a pension fund [for a small business], there may be more than $250,000 in that pension account at a particular bank. You may want to consider moving it to separate banks so that you're under the limit at each one."
Rowley: "The good news? Those interest rates are starting to tick up because the banks are cash-starved. They want your cash."
Everyone: If you have a small child, then absolutely, start saving now. If your kid is about to go to college, you may want to think more conservatively.
Yochim: "Time is on a baby's side right now. Whatever you can, stock it away in a 529 plan. It's a great way to save and you also get tax savings. All states offer a 529 plan. Some of them will give you a tax reduction."
Rowley: "I had recently spoken to somebody whose child is about to go to college and they still had all the 529 allocated in stocks. That's the tricky part. You have to be careful. You should move to something a little more conservative."