If you have a 401(k) you’re probably reeling from the drop in your account’s assets as the stock market has plummeted this year. Just this week alone the Dow Jones Industrial Average fell 5%.

As if that isn’t bad enough, some companies have decided to suspend matches to contributions their employees make to retirement accounts. Among the big and small firms that are suspending company matches are General Motors and Ford Motor.

Small businesses are finding it especially difficult to keep up with retirement plan costs. About 15% to 20% of small businesses offer 401(k) plans, according to the Wall Street Journal. But the troubled economy and higher insurance costs have led many small firms to cut back on 401(k) plans.

Some companies aren’t just suspending company matches, they’re doing away with retirement plans altogether. Companies in the housing-construction, mortgage, and trucking industries are faring the worst.

“We are seeing a slight uptick in plan terminations by businesses who can’t afford the plans or are going out of business,” Laurie J. Shultz, vice president, Emerging Markets Segment for the Retirement and Investor Services division of Principal Financial Group Inc., told the Wall Street Journal.

If you’ve already taken a big hit on your retirement assets it may be tough to stomach the idea that your company could be considering suspending matching contributions, one of the nicest benefits of enrolling in a 401(k) plan. But that shouldn’t keep you from saving for retirement.

Continue to squirrel away money into safe investments to build your nest egg, no matter what your company decides to do. Ultimately, it’s up to you to fund your retirement, and that isn’t going to change no matter what happens on Wall Street.

This entry was posted on Friday, November 14th, 2008 at 7:04 pm and is filed under Topics for Seniors . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.