Keep your hands off

A lot of people mess up when it's time to switch jobs. Here are your options.

(MONEY Magazine) -- The final 401(k) rule to live by is this: Don't touch the money when you change jobs.
The worst mistake you can make is to cash out. Not only will you end up losing much of your savings to taxes and penalties, but you'll also set back your retirement savings.
Instead, pick one of these three options.
SUPER-EASY: ROLL THE MONEY OVER INTO YOUR NEW 401(K) Do this if you like your new plan's low costs and its investment options - and you like having all your retirement money under one roof. (You should: It's easier to manage.)
What to do: Contact your old benefits department and the new one, and sign the paperwork.
ALMOST AS EASY: STAY WITH YOUR OLD 401(K) Go with this option if you like the funds you already picked and are confident you can keep tabs on a 401(k) at a place you don't work anymore.
What to do: Let your HR department know you plan to leave your account behind. (If you have less than $5,000 in it, though, your employer can push you out.) MEDIUM EASY: ROLL OVER INTO AN IRA Choose this option if you like the freedom to invest with nearly any fund company, bank or brokerage, and if you don't mind tracking both the IRA and the 401(k) that you'll open at your new employer.

Check in once a year

Surprise: Your 401(k) is one place where you don't want to do much work. Tinker too much and you could end up doing more harm than good.

MONEY Magazine) -- When you've got your plan in gear, you really can relax. All you need to do is minor maintenance one day a year. Pick any day for this checkup: a week after your birthday, the day after New Year's, whatever.
Start by revisiting your asset mix. If market downturns have been giving you sleepless nights, you may have taken on too much risk. Consider shifting to a more conservative asset mix by moving money from stock funds to bond funds.
Playing it safer is something you should do anyway as you get closer to retirement; you can't afford to be caught by a market slump that near the finish line.
If you have a do-it-yourself portfolio rather than a target-date fund, this checkup date is the time to rebalance. In other words, it's time to correct for the fact that during the year, gains in some funds and losses in others throw your asset mix out of whack.
Compare your current allocations with your targets. If they are off by, say, 10% or more, transfer enough money out of your winners into your losers to get back to your original mix.
By doing this every year, you force yourself to sell high and buy low - the very definition of smart investing. In most plans, you can rebalance with one phone call to your 401(k) provider or with an online tool.
And, of course, if you hold a target-date fund, you're off the hook: All this is done for you.
Ignoring your 401(k) for 11 months and 29 days every year may seem like slacking off, but it's far, far better than tracking your returns too closely. Obsessing over performance could entice you into the classic mistake of chasing yesterday's winners.
Benefits consultant Hewitt Associates found that in 2005 many 401(k) investors loaded up on emerging markets funds, which had been delivering double-digit returns. But in May of this year, foreign markets tanked, and panicked investors found themselves selling with 20% losses.
"When you chase the highest-returning funds, you often end up selling at the bottom," says Lori Lucas, Hewitt's director of participant research. That's why you want to pick an asset mix (or target fund) that you can stick with through market gyrations.

Limit company stock

Remember Enron? You already count on your employer for your paycheck -- don't count on it for your portfolio gains as well. We tell you the acceptable amount.

(MONEY Magazine) -- You may have full confidence in your company's future, but when it comes to your 401(k) strategy, nothing can trip you up more than blind loyalty.
Never put more than 10% of your money in your employer's stock. After all, your job security already depends on your firm's financial health.
If you load your 401(k) with your company stock, you are wagering your retirement security on your employer as well.
Yes, if the stock soars, you'll do better than if you had spread your money around. But the risk isn't worth it.
The most recent dramatic example of just how serious this risk can be is Enron, which imploded after its executives allegedly engaged in various acts of malfeasance.
But corporate shenanigans aren't the only reason a company's stock might take a major hit. A company with perfectly honest management might fall on hard times because the management is incompetent, or, if competent, perhaps the victim of economic forces over which the managers have no control, say, an influx of cheaper products from abroad.
Or maybe the big product the company was counting on to grow earnings generates disappointing sales.
Fact is, American corporate history is bursting with examples of companies that once strode the economic landscape like a Colossus that later found themselves struggling for their very existence. Just look at Ford and GM.

Spread your money around

You don't need to have the stock-picking skills of Warren Buffett to build a nest egg. Here's how to allocate your portfolio in a way that can get you most of the way there.

(MONEY Magazine) -- However much you save, you still want to make sure that you're smart about your investments. That doesn't mean you have to be the next Warren Buffett.
What you must do, though, is choose a suitable combination of stock funds, bond funds and other investments. The idea is to create a blend of assets that's aggressive enough to improve your odds of earning the returns you need, but not so risky that you'll panic during market downturns and bail out.
This may sound difficult in its own right, but most 401(k)s offer a simple and perfectly prudent solution: a target-date retirement fund. These funds, which invest in stocks, bonds and other assets, create a portfolio geared to someone who plans to retire in a particular "target" year. Just pick the fund whose target is closest to your desired retirement date. (One tip: Don't mess up your allocation by investing in other funds too.)
If you prefer a more tailored mix, use the Asset Allocator tool and answer the questions about your time horizon and tolerance for risk. Once you and the computer settle on a portfolio, you'll need to select stock and bond funds to fill it. Just remember one simple rule: Stick with low-cost funds, which let you keep more of the returns. How can you tell which funds in your 401(k) are low cost? Many large-company plans offer funds that mimic market indexes (look for the word "index" or the name of an index like the S&P 500 in the fund's name); expenses often run less than 0.3% of assets a year.
If you can't fill your portfolio with indexers, look for choices that have generic names such as Small-Cap Value or Large-Cap Growth. These institutional funds also generally have modest fees - say, 0.7% of assets for stock funds.
In any event, stick with stock funds that charge less than 1% and bond funds with fees under 0.5%. Your plan's administrator can tell you each fund's expense ratio.

Save early and often

How much you put away matters more than how your investments fare. Here's how to know if you're on track.

(MONEY Magazine) -- The most important part of 401(k) investing is also the easiest to master: It's the act of saving regularly.
You may think 401(k) success is all about selecting funds with hot performance. In reality, how much you save matters far more than what your funds return.
Suppose you started work in 1990 with a $40,000 salary. You saved just 2% of your pay but were such a brilliant investor that you put your 401(k) into top-returning funds every year. You would have finished 2005 with nearly $50,000 in your 401(k).
Now suppose you were so clueless about investing that you picked mediocre funds year after year, but you were frugal enough to save a full 6% of your salary. You'd hit 2005 with nearly $120,000. That's right: more than twice as much as the brilliant saver.
A growing number of employers will automatically sign you up for the company's 401(k), as well as regularly increase your contribution rate, making saving literally effortless.
Problem is, these automatic investments often start at just 2% to 3% of your salary. Not enough. If you're in your twenties, suggests Christian Echavarria, founder and senior vice president of Invesmart, a 401(k) advisory firm, figure on putting away at least 6% of your salary, or 10% if your employer doesn't match your savings.
Then increase your contribution by as much as one percentage point a year. In your thirties, you should be saving 12%; in your forties, 14%. By the time you reach your fifties, you may need to save 15% or more, depending on how much ground you have to make up. It helps that by age 50 you can contribute an extra $5,000 a year on top of the regular 401(k) max (for a total of $20,000 in 2006).

Best cafeterias - and gyms to work off that lunch

Gourmet fare is the norm (and sometimes even free!) at three standout corporate cafés. Plus: A look at three Best Companies that offer employees top-notch onsite fitness centers to help them stay in shape.
By Anne Fisher

Google
Best Companies Rank: 1 "We've made mac and cheese with wild mushrooms, duck confit, and truffles."The 17 cafés on Google's headquarters campus span 20 cuisines and are legendary for their fantastic (and free) food. Says chef Nate Keller: "Google is all about fresh looks at simple concepts, so our takes on macaroni and cheese are always popular."

eBay
Best Companies Rank: 68 Maintains a full-time staff of certified personal trainers and nutritionists. To help auction-weary staffers decompress, eBay also has prayer and meditation rooms with plump pillows and tatami floor mats. Ommmmm.

eBay
Best Companies Rank: 68 "My favorite dish: shrimp cakes with Asian slaw, cilantro aioli, and an orange sombai reduction."Chefs like Chad McWilliams emphasize antibiotic-free meat and milk, and local, seasonal organic produce. Last June the cafés debuted Your Dinner: Chefs slice, dice, and chop all the ingredients for a gourmet meal that you can then whip up at home.

SAS Institute
Best Companies Rank: 29 With everything from a pool, cardio room, and racquetball courts to a putting green and horseshoe pits, the SAS gym will detail your car or do your dry-cleaning while you sweat. Center also sponsors European ski trips.

FactSet Research Systems
Best Companies Rank: 52 "Anything stir-fried or spicy, they go crazy. And tofu! I never used so much tofu in my life before I came here."Lunch is free Monday through Thursday, and CEO Phil Hadley eats with the troops almost every day. Chef Alex Dino studied with Eric Ripert at Le Bernardin in New York. The main difference between haute cuisine and corporate fare? FactSetters, apparently, can't get enough stir-fry.

Goldman Sachs
Best Companies Rank: 9 Want to go rock climbing in Manhattan? Get a job at Goldman, whose gym offers a rock-climbing wall, martial-arts boot camp, massage therapy, and Pilates - and will outfit you with workout duds too.

Sure income for the very (very) long haul

A longevity annuity guarantees payments decades from now - that is, if you live to collect. From Money Magazine's Walter Updegrave.

(Money Magazine) -- We all want to live longer, but in cold financial terms, making it past your 80th birthday greatly increases the chances that you'll run through your retirement savings. One way to prevent this is to buy an immediate annuity, which gives you a guaranteed income for the rest of your life.
In general I'm a big fan of immediate annuities, but the fact is that most people are reluctant to annuitize any significant portion of their wealth. After all, once you put half of your assets into an immediate annuity, you can no longer tap those savings in an emergency. And if you die soon after buying the annuity, the payments will stop and you'll have given up much of your assets for a small benefit.
But a few insurers are now offering a twist on payout annuities that allows you to protect yourself against outliving your savings with less money up front. It's called an "advanced-life delayed annuity," or a longevity annuity for short.
Here's how it works. Instead of devoting, say, 50 percent of your assets to an immediate-payout annuity at age 60 or 65 and collecting income right away, you use a much smaller portion of your money - 10 percent or so - to buy a longevity annuity that doesn't begin paying out for at least 20 years.
Bear in mind, if you don't make it to the age at which the payments start, you and your heirs get nada. Insurers are counting on the fact that most people won't live to collect, so they are willing to promise you a substantial income in the future for a relatively small premium today.
The benefits
To my mind the concept behind longevity annuities makes a lot of sense. In effect it's like buying a homeowners or health insurance policy that has a very large deductible. You're insuring yourself against a catastrophic risk you can't handle on your own - in this case, running out of money late in life - while holding your premium to a minimum.
You guarantee yourself an income to cover your spending late in retirement while leaving more of your savings available to you today (or available to your heirs if you die young). And you can comfortably spend down a greater portion of your savings earlier in retirement, knowing that those longevity annuity payments will eventually kick in.
Weighing the decision
If you want to insure against running out of money late in life, I think the longevity annuity gives you a bigger bang for your buck than any other type of annuity. But you must meet the following criteria:
You have enough saved so you can give up a portion of your assets for income that won't materialize for decades - and that you might never see. Otherwise, you could face some grim years until you start collecting the longevity annuity's payments.
You can purchase a longevity annuity with money from taxable accounts or a Roth IRA. That's because the IRS requires you to make annual withdrawals from a regular IRA after age 70 1/2; annuity payouts that don't start until very late in life might not fulfill that requirement.
Picking a product
If you're in the market for a longevity annuity, you'll need to decide at what age you want to begin taking payments. The older you are, the higher your payments will be, as the table at right shows, so you'll need to weigh that benefit against the possibility that you'll never see the money. Also, since the annual income can vary widely by insurer, request quotes from several companies. Most policies offer an option that pays a death benefit or refund, but you'll have to shell out more money for the same income. That would defeat the purpose of buying guaranteed income for the smallest premium. Skip it.

Look who's bailing out Wall Street

Scramble for cash
Devastated by tightening credit markets and the mortgage mess, Wall Street firms have sent out an S.O.S. Their cries have been answered in large part by overseas investors, which have agreed to inject billions of dollars into America's biggest banks.The rescue effort has been led by investment funds run by foreign governments, also known as sovereign wealth funds, which have forged a string of deals in recent months.With the U.S. economy limping along, expect more deals. Follow these panels to track the money trail.

Citigroup
The financial giant has raised about $20 billion since November, mostly from sovereign wealth funds. Citi also plans to raise an additional $2 billion through the public sale of preferred securities.Who's buying: The Abu Dhabi Investment Authority, the world's largest sovereign wealth fund; the Government of Singapore Investment Corp., which manages Singapore's reserves; Saudi Prince Alwaleed bin Talal.
Merrill Lynch
Under new CEO John Thain, the company has raised $12.8 billion from a long list of investors based primarily in Asia and the Middle East.Who's buying: Sovereign wealth funds like Singapore's Temasek Holdings, Korea Investment Corp., and the Kuwait Investment Authority; Mizuho Corporate Bank, the investment banking unit of Japanese financial giant Mizuho Financial Group.

Morgan Stanley
While the brokerage hasn't suffered as deeply as Citi and Merrill, it has still found it necessary to shore up its capital base. The company received a $5 billion infusion late last year.Who's buying: The state-run China Investment Corp., which grabbed headlines when it took a stake in private equity titan Blackstone Group last summer.

Bear Stearns
The brokerage struck a deal with a Chinese investment bank last October, with the two firms agreeing to invest $1 billion in each other.Who's buying: Citic Securities Co., one of China's largest state-run banks which made a dual listing in Hong Kong and Shanghai last year.