[Fern]

Pennywise, it's not true that you cannot "touch" the money in the 401k if there's a stock downturn. What you could have done is transfer it to a money market fund (still within the 401k family) and thereby have preserved it with no loss.

The reason the government limits when you can withdraw is because 401ks and IRAs' primary purpose is for use as a retirement savings vehicle, not a checking account. If people could make withdrawals whenever they wanted (you can now, but not without a 10% penalty before 59 1/2) they would fail to meet their purpose, helping Americans save for retirement.

If you are unhappy with the fund choices now availalbe in your employer's 401k, well, that is another story and it would be perfectly reasonable for you to approach the HR person and bring that up. The employer has a fiduciary responsiblity, i believe, to offer a well balanced portfolio across the full ranke of risk/reward spectrum.

There is no kickback to the employer involved.

Savings bonds and CDs are fine, but over the long-term, they will fail to keep up with inflation and you'll be much further behind than if you were invetsted in stocks or stock mutual funds. DRIPS good too.