It sure is hard to have faith in your 401k. It seems pointless to keep putting money into it every month when the total balance goes down. Plus it seems hopeless that you will ever have enough to retire. While the temptation is to stop contributing to your 401k completely, don’t give in! Look at it this way:
1) The money you are contributing now is actually going a longer way than you think. You are buying at the low point in the market and getting more bang for your buck. In fact, when the market comes back, you will actually have more than you thought.
2) Step up the percentage that you are increasing. I know you think that it ludicrous in this market but that is the best way to get back to the level of money you were at before the market tanked. A woman in Simply Money realized she was only contributing 2% instead of the 10% she could afford.
3) Most of us aren’t saving as much as we should be anyhow, so that is another reason to increase the percentage to our 401ks.
4) Keep your costs low in your 401k by choosing the index funds that are available such as ones in Vanguard.
5) This will allow you to retire at an earlier age than you think. Run your numbers on this retirement calculator at Kiplinger.com.