Are 401(k)s a Bad Idea?

And while CDs may be a secure investment, “CDs serve a purpose for liquidity needs within a certain period, for example, if a client wants to buy a house within three years, go on a vacation or short term goals, not long-term,” says financial planner Williams. “Generally with the taxes that you have to pay on the interest along with low interest rates, they’re not adequate for long term investing strategies.”

Foreign exchange could increasingly play a part in long-term investing, including investing for and during retirement. “People are more savvy to the fundamentals of major economies of the world,” says Betsy Waters, global director of DBFX, Deutsche Bank's online foreign exchange trading platform( Stock Quote: DB). Waters notes that most people already have some currency exposure in their retirement portfolios, which may allow them to hedge against other others bets, for example on domestic stocks.

Reconsidering the 401(k)
You may consider a 401(k) a must, however, if your employer matches your contributions, or if you’re lucky, makes contributions whether you do or not.

Since traditional 401(k) contributions are made with pre-tax money, the money you would have spent on taxes is invested. Your earnings are also compounded over time, which allows earnings to become part of your underlying investment.

Before you invest or consider moving your money from one fund to another, you’ll need to look at your investment horizon and risk tolerance. How many years from now do you plan to retire, and how long will you need your money to last?

When you’re looking at individual mutual funds, do your due diligence to make sure the fund is appropriate for your needs by using resources like TheStreet.com Ratings Screener.

Younger people “have a wonderful chance to get ahead of the curve.” Says MicKey. “Now is the time to dump as much as they can afford into [a 401(k)]. But if you’re in your 50s or 60s and you’re concerned about your retirement savings, you may want to meet with a financial advisor to talk about changing your strategy.