Your 401K Plan May Fall Victim to Wall Street Failure - NBC Right Now/KNDO/KNDU Tri-Cities, Yakima, WA |

Your 401K Plan May Fall Victim to Wall Street Failure

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WASHINGTON--  It is hard to believe, but one year ago Thursday marks the S&P 500's highest closing on record.

Fast forward 12 months and the economy rests in a state of crisis.  Virtually every American will feel Wall Street's failure, even those tapping into their 401k. 

"Far as I know, I try to keep up but I've lost an awful lot of money in the last say three months," says Rod Kessler, a recent retiree.

Like other recently retired workers, Rod is leaving the workforce at one of the worst times in American history.

"The biggest risk you have when you retire is that there's a down economy just before or just after you retire," says Erik Pielstick, a local financial planner.

And that is one of the biggest problems the country is facing.  So what to do?  Should you risk the tax incentive and pull out early while there's still money resting in the fund?  Or do you wait it out?

"There's always that feeling of fear when you see the market plummeting the way it is today," adds Pielstick.

But don't panic just yet.  Here are some tips to ease your 401k fears: first, invest early. Invest now. If you're in your 20's and have access to a 401k consider taking it.  With social security still a question mark, your 401k is as important today as its ever been before.  Next, identify your risk tolerance for a fluxtuating market.  History says it will rise again.  And finally: plan ahead.  Start in your 40's and manage your assets.  Remember, this money should last you the rest of your life.

"If you get out of the market now and come back in when you think the market's doing well, you're doing the opposite of the American dream," says Pielstick.