• Because equities and fixed income investments behaved differently during the recent rally, if you haven’t rebalanced recently, your asset allocation is likely out of alignment with your long-term investment plans. Rebalancing at least annually to your target allocation can help reduce the impact of cyclical volatility.
• Look at the types of investments in your plan. If you were weighted more toward small- and mid-cap investments or foreign markets to take advantage of the recent stock market rally, it may be time to ensure your stock portfolio is well diversified and includes high-quality blue chip and multinational companies.
• If your plan offers alternative investment classes such as real estate funds, you may want to consider adding these or other hedges against future inflation.

• If your employer is among those who maintained matching contributions, or if they are coming back after a temporary suspension, at the minimum you should contribute enough to maximize that match (usually 50% of what you contribute up to 6% of your salary).
• If possible, aim for 10% of your annual salary or the $16,500 maximum in 2010, whichever is higher.
• If you are age 50 or older, you can contribute an additional $5,500 in 2010, which could help make up for recent setbacks.

Understand the costs of investing.
Over time, the fees and expenses associated with some investment vehicles offered by retirement plans can take a noticeable bite out of your portfolio’s growth. Unfortunately, these costs aren’t always clearly disclosed.

• There are tools available, both online and in print, which will let you compare your plan’s costs to others in the same industry.
• Look at the prospectuses for your plan’s investment options. Actively managed vehicles often carry higher costs than passively managed index vehicles, and each style has certain advantages and disadvantages you should consider.

Even if you were on track going into the recent downturn, in light of the changing investment environment and market outlook, we recommend that you meet with your Financial Advisor and formally re-evaluate your retirement plan and progress toward your savings goals. Together you can determine if your plan is on track and, if not, what you can do to get it there.

Rebalancing does not ensure a profit or protect against a loss. Make sure to consider the risks of each investment carefully before investing. Past performance is not indicative of future results.