Should you keep your cash safe or invest your money in your 401(k) or Roth IRA. Where should you invest your money given recent events?

Q: With interest rates as they are and investments frequently losing money, does it make sense to fund my Roth IRA? Also does it make sense to continue to put six percent of my paycheck into my 401K?

My employer matches my contributions with three percent in company stock. I can’t help but feel if I had the cash I’ve invested over the years I would be better off.

A: We’re not financial advisors, but we sure do feel your pain about making a significant long-term investment and then not seeing that investment appreciate in value.

Over time, however, money invested in equities tends to do better than money that has not been invested at all. Having said that, if you invest your money in certain equity investments (certain stocks that end up being real losers) you will find yourself in a worse position than if you had put that money under the mattress.

Experts routinely advise investors to have some diversification in their portfolio and not place all of their money in any one class of investments. You shouldn’t be fully invested in real estate or fully invested in bonds or fully invested in the stock market.

Your 401(k) contributions tend to be a good idea as you reduce your taxable income by the amount you contribute. It’s as if the Federal government gives you a boost up front to invest those dollars.

Let’s say you have $1,000 to put into your 401(k) and let’s say that the Federal government might get 15 percent of that money in taxes if you don’t put the money into the 401(k) account. On day one, you put in that money and you will have “earned” 15 percent on the money. How you invest the money after that is up to you.

When it comes to your Roth IRA, you are putting money into an IRA account with after-tax dollars. That means you have already paid the Federal government taxes on that money. Better yet, Roth IRA investments grow tax free forever. Years from now, when you retire and withdraw money, you won’t pay taxes on those withdrawals either. And perhaps best of all, you get to decide what mutual funds or other investments you will make with those funds.

As you answer these questions, you can decide for yourself whether putting money in the 401(k) and the Roth IRA are worth it to you. The real key for you is to know where you have invested in the past and where you should invest in the future. That question would be the same whether you had the money in the 401(k), a Roth IRA or in a brokerage account.

You may want to talk to an investment professional at any of the many national brokerage houses to discuss your assets and your asset allocation strategy. You should find a brokerage house that won’t charge you for the consultation and can give you general recommendations. You won’t need to bring any checks or other cash with you to pay them and should feel no obligation to invest with them.

Another option is to find a fee-only financial planner who charges by the hour. One good choice is Garrett Planning Network ( You can also check out the National Association of Personal Financial Advisors (

If anyone pressures you during these conversations, you should walk out. But if you find someone you like, who guidance makes sense for your future financial life, you might want to keep the conversation going.

Just make sure you understand what you are being offered, understand where they make their money, understand any fees that might be charged to you and never sign anything without first taking it home and talking to someone else in the family about what you are being offered.