MYTH: ONCE YOU SELECT YOUR FUNDS, YOU'RE DONE. OK, you don't need
to do a total overhaul every year. But you should check in on your
portfolio annually to make sure your allocations have not changed
as a result of stock market swings.
MYTH: IF YOU WORK FOR A GREAT COMPANY, YOU SHOULD INVEST HEAVILY
IN ITS STOCK. Almost always a mistake. Experts say you should keep
no more than 10 to 20 percent of your 401(k) in company stock. If
the company's earnings go south, you could lose both your job and a
large portion of your retirement savings in one nasty blow.
MYTH: YOU CAN'T TOUCH THE MONEY UNTIL YOU RETIRE. Technically,
yes. But most companies let you borrow as much as 50 percent of
your balance. But if you leave the company, you must pay back the
loan in full. While borrowing isn't a great idea, a 401(k) can help
fund tuition or the down payment on a house.
