Getting Shrewder About Your 401K

Although your feature, "The smart 401(k)" (Cover Story, July 3), was pretty much on the mark, I found the sample portfolios awfully conservative--particularly for the younger investor. Most investment experts believe that 401(k) investors in their 20s can afford the risk of having a minimum of 65% of their accounts in stock funds--with the most aggressive of them going as high as 90%. Even older investors can afford higher risk. If you have as little as seven years until you need your money, two-thirds should be in stock funds, with the rest in short-term investments.

Richard Sasanow

New York

Your story provided valuable information, but there were a few technical misstatements. If an employee has a vested balance of more than $3,500 in a 401(k) plan, he cannot be required to withdraw it upon termination of employment. Rather, the employee has the option of leaving his account in the plan for future distribution. Also, an employee may borrow only up to 50% of his vested account balance, not 50% of his account balance. For short-term employees, the difference may be substantial.

Kevin F. McCabe

Moyer & Ross Inc.

New York

What an interesting concept! I can opt out of my employer's 401(k) plan, enjoy my money now, and when I'm broke at retirement, sue my employer because they didn't hold a gun to my head and make me save. Has our litigation-crazy society really reached this level? If it has, it's time to pull the plug.

Alvin L. Thomas