The past several years have been rough on many 401(k) participants. The 2008–9 market decline had a devastating impact on many participants nearing retirement. The press, and many annuity salespeople, have had a field day bashing the 401(k) as a poor retirement savings vehicle.

The reality is that 401(k) accounts are a part of your investment portfolio and need the same attention and monitoring that your IRAs, stocks, and mutual funds do.

Many will debate whether it is right or fair to put the onus for funding retirement on the backs of employees. Let’s leave that debate to others and focus on how to make the best of your plan and investment options.

For those who are starting out in their careers, my suggestion is to contribute as much as you can afford to your retirement plan. At the very least, try to contribute enough to receive the full company match. You have the luxury of time and the ability to take advantage of many years of compounding your investment returns.

For those of you in the middle of your career, you should think about maxing out your contributions. This can be tough, especially if you are also trying to save for your kids’ college educations, let alone incurring the ongoing costs of raising a family. The expectation at this point is that your career is on the move and your compensation is rising as well.

As you get closer to retirement, continue to max out your contributions. You might be in the middle of your kids’ college years as well. Keep in mind that the best gift you can give your children is not being a burden to them financially in your old age. Save all you can at this stage.

Here are some investing tips for any age:

  • Diversify. Allocate your assets in accordance with your retirement goals and your risk tolerance.
  • If you have investments outside the 401(k) plan, allocate your 401(k) as part of an overall portfolio, not as a stand-alone account.
  • If your plan is lousy, try to choose the best couple of funds in the plan and focus your contributions there. This assumes you have investments outside of the plan and can balance out your overall allocation with those outside investments.
  • Don’t assume that your 401(k) alone will be enough for retirement.
  • If you go with the plan’s target-date fund, make sure you understand the pros and cons of this option.
  • Don’t overindulge on your company stock if that is a plan investment option. If you don’t know why this can be hazardous, just find a former Enron employee, who can unfortunately speak volumes about this.
  • If you think your company’s plan could be improved, talk to the plan’s administrator. Do your homework first and approach him or her in a polite, businesslike fashion.

Your 401(k) plan is likely your biggest retirement savings vehicle. Be in control of it; make it work for you.

Roger Wohlner, CFP® is a fee-only financial advisor at Asset Strategy Consultants. Roger provides advice to individual clients, retirement plan sponsors and participants, foundations, and endowments. Follow Roger on Twitter; connect with him on LinkedIn.