Despite the recent black eye given to 401(k)s concerning performance and other issues, most advisors believe they're still among the best retirement vehicles. "People got burned and they blamed their 401(k)s," says Scott Kays, president of Kays Financial Advisory Corp. in Atlanta. "The real problem lies with bad investment strategy and getting away from basic asset allocation, not with the 401(k) itself."
For his clients, Kays advises that they invest up to the full company match (if that option is still available) in their 401(k), which is generally in the area of 3% to 8 %. Then he advises investing to the max in a Roth IRA, and then going back to the 401(k) if there's anything left to sock away. "Our approach didn't change even during the recent bear market."