401(k) investors stay the course

Some happy news for those of us who care whether Americans are saving enough for retirement: According to a just-released survey by Hewitt Associates, only 4 percent of 401(k) participants have stopped contributing to their plans as a result of the recent financial chaos. And the rate at which they're saving has declined only slightly.

Whether this speaks to the intelligence, courage, or plain old laziness of investors isn’t for us to judge. But it is probably a good thing, both for the markets and for the long-term financial health of 401(k) participants.

As our Money Lab has noted, underfunding a 401(k) plan and cashing out of one entirely are two of the biggest financial mistakes investors can make.
 

On a less positive note, the survey reports that many investors have been moving money out of stocks and into seemingly less-risky alternatives within their plans. While that’s almost certainly better than bailing out entirely, it also means they’re selling low, which, along with buying high, is rarely the best financial move.

In other news from the 401(k) front, some companies  are reducing or doing away with their employer match, but contribution limits for 2009 will be higher than this year’s. — Greg Daugherty

Greg writes the “Retirement Guy” column each month in the Consumer Reports Money Adviser newsletter.