Retirement Savings Accounts

If you have a retirement savings account right now such as a 401(k) or IRA, you probably cringe every time you see a new statement. You look at the earnings line and it's always a significant negative number. You look at the balance and it's less that it was a year ago.

But don't panic, especially if you have a while to go until retirement. Just hold steady and know that right now you're "buying low." The markets traditionally rebound very well after significant losses like these, so you'll likely catch up to where you were fairly quickly once the recession ends. This is another reason why it's important to start investing as early as you can, so you're better able to weather the ups and downs of the market.

The chart below is a simple example of what happens when two people both invest $100 per month when they both have 30 years to go until retirement. John starts investing immediately while Steve waits 10 years. Who would you rather be: John or Steve?