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5 tips for managing your 401(k)

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On our Circuit Cents segment, we asked Sandra Block from Kiplinger's Personal Finance for tips on managing a retirement savings account. Here are five.

1. Look at your fund.
"One thing that many studies found when the market was doing poorly was that the way people dealt with it was just by not looking. You would hear all these reports of people who would get their statements in the mail and not even open them. They just don't want to look. They're putting money in there, they might have a general idea of what's in their plan, but they don't monitor them that closely. We're busy people, and they have other things they'd rather do."

2. Invest more than the automatic amount.
"More and more companies are automatically enrolling people in their 401(K) plans at a 3 percent rate. That's great, and it gets people started, but what people do is, they don't increase it. And 3 percent is not enough. Certainly, people need to go in and see if they're saving enough. ... Auto enrollment sounded like such a great idea when it started, because so many young people weren't signing up for their 401(k)s at all. ... The problem is inertia. People stop at that 3 percent. Three percent is nowhere near enough. I've seen studies that say you should save 15. Now, that may seem unrealistic to people, but somewhere between 3 and 15 is where you should be."

3. Resist the temptation to tinker.
"That's where people get into trouble. If you have a good, diversified portfolio of stocks, bonds, international maybe, a little bit of real estate or something like that, you shouldn't really tinker with it too much. Except to the extent that as you get closer to retirement, you want to be a little more conservative. ... There's a real risk of playing around too much."

4. Save, save, save.
"The most important thing you can do is saving regularly. That's the one thing that you can control, that is the one thing that will give you the best outcome no matter what your allocation is. ... I think sometimes we make this more complicated than it needs to be."

5. Don't take money from your 401(k) to buy a house.
"I don't like it at all. I really don't like it. The IRS will take about a third of that money. So first of all, you're not going to have that much; you're giving it away. And you're putting a permanent dent in your retirement savings plan."