401(k) Midyear Review

Now that 2010 is half over, review your 401(k) plan and be sure you're still investing wisely. Worth considering:

Rebalance if necessary. Is the stocks/bonds mix still the way you want it? If it's at least 10 points off (say you wanted to be 50/50 in stocks and bonds but it's now 60/40), reallocate money around to get back on track.

Max your match. Your company's match is as close to free money as you'll find. Take advantage of it.

Put your raise to work. If you were lucky enough to get a raise, pour some of your increase into your 401(k). You'll never miss the money, since you didn't have it before.

Watch your lineup. Your employer may have merged or replaced one of your 401(k) funds. You might be put into a money-market fund or a new fund. So be sure you're in the fund you want. Also check for new additions in the potential investment menu.

Research your holdings. Just because you may have three mutual funds does not mean you are diversified. Those mutual funds might all have the same stocks in their portfolio. Spread your money across different sectors and opportunities.

Review beneficiaries. If you remarried, divorced or had a child since January, double-check that your beneficiaries are up to date.

Take possession of it. If you are no longer working for that employer, it is always in your best interest to take the 401(k) with you and convert it into an Individual Retirement Account. That way you have control and not your former company.