401(k) Accounts Recovering

When was the last time you checked your 401(k)?

A few months ago, my girlfriend confided that she was scared to look at her balance after opening her statement only to find her account had nearly been wiped out. Many other workers have taken the same shut-eye strategy. It's like riding a roller coaster: If you don't watch, maybe it won't be as bad.

But you may want to pry your eyelids open again. The recent stock market rally that has lifted the Dow to above 9,000, erasing its year-to-date losses, has also given retirement accounts a boost. Encouraged, I peeked at my own 401(k) balance and found that it has increased in the past three months, finally recouping my 2008 losses and then some.

According to the Employee Benefits Research Institute, workers in every age group and tenure have seen improvements in their retirement accounts since the stock markets hit bottom on March 9, 2009. The gains ranged from nearly 15 percent growth among workers ages 25 to 34 with one to four years of experience to about 3 percent for workers 55 to 64 with 20 to 29 years of experience.

The group's analysis also shows that younger, inexperienced workers have rebounded much more readily from the stock markets' mood swings. Their retirement accounts are up about 67 percent compared to Jan. 1, 2008, though one imagines they weren't very high to begin with. Older workers' accounts are still 13 percent off from that date.

There is much debate over how to best handle your 401(k) in a volatile economy, and the strategy that will best for you will clearly depend on your stage in your career, your age, your needs in retirement and your appetite for risk. (Kiplinger's has this guide, and Motley Fool serves up these tips.)

But at least it seems that this roller coaster ride is almost over. It's safe to open your eyes again.