There are few guarantees in life–especially when it comes to planning for your golden years. But one thing is certain: If you start investing when you're young, you have a better chance of meeting your goals. While 2008 was bad news all around for most investors, it was especially trying for retirees or those nearing retirement age. You probably don't need to be reminded that stock markets worldwide suffered their greatest losses since the 1930s. Domestic stock funds lost 37%, on average, while international stock funds lost more than 44%. Even so, a 401(k) plan is still the ideal way to invest for the long term, says Richard Peace, CFP, a financial planner with FSC Securities Corp. in Colorado Springs, Colorado. "By investing periodically, you're dollar cost averaging, so you buy more shares when prices are low.†If you invest $200 a month, for example, you'll buy eight shares of a mutual fund when they sell for $25, but 10 shares if the price drops to $20. You'll wind up with a lower cost per share and higher profits when the share price goes up to higher levels. Most financial advisers also tell young investors to stick with stocks, despite feeling psychologically scarred from the last year. Why? Take a page from history. An investor who bought stocks at the worst possible time–the start of 1931–lost more than 43% that year but still had an 8.2% annualized return at the end of 1951 and a 10.8% average annualized return through 1961, according to Ibbotson Associates, a Morningstar company. So, despite the substantial losses of 1931, investors who remained in the markets regained all losses by 1935. If the stock market can provide that kind of a return through the Great Depression, World War II, and the Cold War, investors may anticipate similar growth from their investments over the next 20 or 30 years. In this article, you'll find individuals and families who, undeterred by market volatility, have continued investing in their retirement and are poised to reap the rewards. More importantly, black enterprise asked financial advisers to evaluate each of their current strategies and suggest ways to turbocharge their 401(k) investing–and yours. The Bachelor: Kirk Hudson, 25 | New York Current Savings Strategy: Though he's only three years out of college, Kirk Hudson has started saving for retirement through his employer, IBM. "I've always contributed enough to get the maximum employer match for my 401(k),†says the financial markets consultant. "Right now, that's 5% of my pay, around $400 a month.†Hudson made a similar contribution to a former employer's 401(k) until switching jobs in early 2008. "I just had a few thousand dollars in there,†he says of that account, which is still active under the old plan. At his former employer, Wachovia, Hudson directed nearly all 401(k) contributions to a target-date 2045 fund. Target-date funds typically hold multiple stock funds and bond funds. As employees approach their chosen retirement date, the mix gradually shifts from stock-laden mutual funds to more conservative bond funds. With some 36 years to go until his projected retirement date, Hudson can be a bit more aggressive, so his fund-of-funds tilts heavily toward stocks. In late 2008, though, most target-date funds lost heavily as the stock market sank. Today, Hudson has roughly $10,000 in IBM's 401(k) plan. In the midst of the market meltdown last year, he responded by changing his portfolio's asset allocation so that 40% is in a stable value fund. The fund provides a market rate of interest, but no growth potential because it is unlikely to keep pace with inflation. The remaining 60% is still in the 2045 target-date fund. Hudson also has about $2,000 in his former employer's 401(k). That money rests in a similar target-date fund. Does Hudson's investment strategy make sense? Says Erika Safran, CFP, principal of Financial Asset Management Corp. in New York: "I am not a fan of target-date funds. They present themselves as one-stop shopping investments, but target-date funds from various providers are not uniform in their investment allocations.†Investors need to do their homework to make sure that the fund's composition is what they had in mind, urges Safran. "What's more,†she says, "if a target-date fund is a collection of mutual funds, as many are, investors pay additional management fees.†That is, you might be paying fees to the underlying funds as well as to the target-date fund. The Makeover: "If he is risk-averse for the short term, he should consider investing the $10,000 in bond funds,†she says. "That should include inflation-adjusted bonds or TIPS.†TIPS are Treasury Inflation-Protected Securities. Issued by the federal government, they offer a yield designed to keep pace with inflation. Longer-term, Safran suggests Hudson put 50% of his portfolio into a large-cap mutual fund that holds both blue-chip growth stocks and value stocks. "He also might have 10% in a small-cap stock fund, 15% in a mutual fund made up of foreign stocks focusing on developed markets, and 5% in an emerging market stock fund,†she says. "The remaining 20% should be allocated to domestic bond funds and cash.†Lastly, Hudson should consider maximizing his contribution to his 401(k), if possible. "An annual contribution of $16,500 (the maximum salary deferral in 2009 for someone under age 50) growing at a 5% annual rate will grow to more than $2 million at age 65,†Safran says. "The company match is a huge bonus.†With these suggested changes, Hudson can take more control over his investments–and his destiny. Family Matters: Jeremiah, 34, Tamara, 32, and Kanon Dervin, 6 mos. | Chicago Current Savings Strategy: The Dervins had a son earlier this year. Even though they're concerned about funding the baby's future education, they're still planning for retirement. Tamara is an auditor for the U.S. Commodity Futures Trading Commission, a federal agency, where she's worked for four years. Even though that means she has benn working toward a federal pension, she doesn't know if she'll stay at her current job long enough to qualify for its retirement benefits. In the meantime, Tamara participates in the federal Thrift Savings Plan, Uncle Sam's version of a 401(k). Until early 2009, Tamara had been contributing 5% of her pay into the account, where she gets a full match. After their son was born, new expenses forced her to cut her contributions to 2% of pay (about $180 a month). Naturally, the cutback reduced her employer's match. "I intend to go back to 5% soon,†she says. Her savings in the account now stands at roughly $12,500. The allocation of assets is: 25% in a common stock fund, another 25% in a small- cap fund, 30% in an international fund, and 20% divided evenly between a 2030 target-date fund and a 2040 target-date fund. Jeremiah is a corporate account manager with Office Revolution, a commercial office furniture dealership that does not offer a 401(k). Moreover, the couple also owns a health club franchise, and most of their spare cash has been going into the business. As a result, they say, they haven't been able to build up a cash reserve or fund a retirement plan for Jeremiah. The Makeover: "Tamara's asset allocation is reasonable for someone who is willing to take some risk in order to aim for above-average returns,†says Safran. "However, I assume the target-date funds are duplicating her stock market allocations. I suggest she reallocate her portfolio to 60% in the common stock fund, 10% to 15% in small caps, and 25% to 30% in the international fund. Then she can eliminate the target-date funds.†As for Jeremiah, although he doesn't have a company retirement plan, he can contribute up to $5,000 per year to an IRA (those 50 and older can contribute up to $6,000). Jeremiah should consider a Roth IRA. Although contributions to a Roth IRA are not tax-deductible, they will grow tax-free. After age 59½, he can take tax-free withdrawals, which will complement Tamara's taxable distributions from her retirement account notes Safran. Married investors who file a joint tax return cannot contribute to a Roth IRA if their modified adjusted gross income is more than $176,000 in 2009. If their income is between $166,000 and $176,000, married individuals can make a smaller Roth IRA contribution. All taxpayers have until April 15, 2010, to make IRA contributions for 2009. The Dervins can wait until next year to decide whether an IRA is right for them. If their income is midway through the $166,000 to $176,000 phase-out range, for example, Jeremiah can contribute $2,500 (half the maximum) to a Roth IRA. "Rather than make non-deductible contributions to a traditional IRA,†says Safran, "Tamara might increase her contribution to her retirement account. They would receive a tax deduction for her contribution as well as tax-deferred growth. The Newlyweds: Lloyd, 32, and Courtney Young, 28 | Virginia Beach, VA Current Savings Strategy: Lloyd and Courtney Young recently got married and have just moved into a new home. He works for Tesoro Corp., a independent refiner and marketer of petroleum products, as a quality control manager, and she works at Dominion Power, a energy utility, as a design engineer. Courtney's employer offers her a possible pension but Lloyd's doesn't. Both are contributing to 401(k)s at work. Now, they want to be more aggressive about saving. Lloyd is contributing $65 a week, about 5% of his pay, and getting an employer match. All of his money is in a target-date 2040 fund. So far, he has accumulated around $3,000. Courtney, who has about $4,500 in her 401(k), also is contributing 5% of pay (around $160 a month) to her 401(k) and getting an employer match. Of that $4,500, about $2,700 is spread among target-date funds for 2030, 2040, and 2045, with the largest amount (38% of her account) in the 2045 fund. The other $1,800 or so is divided among a stable value fund, a small-cap value fund, a small-cap growth fund, and (to a lesser extent) a large-cap value fund. In addition, Courtney has about $2,000 in a money market fund in a Roth IRA, rolled over from a former employer's 401(k). Lloyd also had money—about $3,000—in a 401(k) from a former employer but he withdrew those funds to help pay expenses related to their home purchase. Even with that influx of cash, the Youngs now have $5,000 of credit card debt. The Makeover: Given the Youngs' situation, what might be some savvy moves for them now? Contributing enough to get the full employer match for their 401(k) contributions makes sense because they're leaving money on the table if they don't. "Beyond that,†says Peace of FSC Securities Corp., "their primary goals should be paying off their credit card debt and building up a cash reserve. They should have at least six months of income in a cash emergency fund.†What about the $2,000 that Courtney now holds in a money market fund? "That's not really suitable for an emergency fund because it's in an IRA,†says Peace. In case of need, Courtney will have to pay some tax and an early-withdrawal penalty to get at those funds. "The money in her IRA should be invested for their retirement,†says Peace, "not earning almost nothing today in a money market fund. She might invest in an international stock fund, to give her more global exposure.†In terms of 401(k) investing, Peace believes the Youngs are too reliant on target-date funds. "Even the long-dated funds usually have some exposure to bonds,†he says. "Young investors, such as the Youngs, with so many years of investing ahead of them, should be primarily in growth mutual funds.†If the Youngs are set on sticking with their current exposure to target-date funds and stable value funds, Peace recommends that all future contributions go toward growth mutual funds. "They should use a large-cap growth fund for those contributions,†he says. "At their age, they should have more growth in the portfolio than they have now.†Once they have paid off credit card debt and established an ample cash reserve, Peace recommends using the additional income to establish a Roth IRA. Those changes, Peace believes, will put the Youngs well on their way to a rich retirement. This article originally appeared in the October 2009 issue of Black Enterprise magazine.