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Step 5: Create a Retirement Action Plan  
As the markets tumbled, 29-year-old Kristen says she watched the value of her own 401(k) drop through the floor and says her mother's 401(k) lost about half its value. Now, Kristen says she's decided to stop making contributions to her retirement fund because she doesn't want to risk losing anything else. "I'm looking for how to get my retirement back on track and then also how to plan for the future for [my mother]," Kristen says.

Suze has three rules for retirement: 

1. Don't panic when the market goes down. Suze says the most important thing you can do in a bad economy is to stay calm—especially if you have at least 10 years until retirement. "There's a big difference between 29 and being 56," Suze says. "Now is not the time to stop investing in your retirement account."

2. Keep investing monthly in your 401(k) or IRA.  Suze recommends making regular payments to your 401(k) or IRA retirement account. "Guess what? Your money buys more shares. The more shares you have, the more money you're going to make by the time you are your mother's age," she says.

3. If you need the money within 5 years, take it out of the stock market. Another important idea Suze emphasizes is that any money you will need to spend—on a house, on college tuition—within the next five years must be invested conservatively. "That is not money that belongs in the stock market," she says. "It never has. It never will. The money that's in the stock market is money that you don't need. ... Because [to be in the stock market] you need time on your side, so that when something like this has happened and the market goes all the way down, it [has] time to recover."

Should you continue investing? Use this calculator to find out!
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FROM: Best Life Week: Your Money Plan 2009
Published on January 22, 2009
Please note: This is general information and is not intended to be legal advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio, and a qualified legal professional before executing any legal documents or taking any legal action. Harpo Productions, Inc., OWN: Oprah Winfrey Network, Discovery Communications LLC and their affiliated companies and entities are not responsible for any losses, damages or claims that may result from your financial or legal decisions.

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