what now? 401k question

[abw]

Last week, on the advise of my plan holder's online adviser, I increased both my contribution and my level of risk. Now that I've supposedly loaded up on undervalued stocks and the market spiked today, what should I do now? Maintain level of risk (I understand that the level of contribution should remain), or take it down a bit. I guess my real question is, how often should you reassess your risk/contribution in regards to your 401k. I'm 55 years old btw.

[cooliemae]

There are a couple of questions you need to ask yourself.

Is the money I'm investing going to be needed for my retirement?

When am I going to retire?

Am I comfortable with my risk level?

It's hard to answer your question without more information...

[responduser]

It is always advisable to contribute maximum towards your retirement fund. But, again you should comfortable with the risk level.

[jIM_Ohio]

The market performance should NOT change your risk profile. Risk is defined more by age, retirement date and your year to year outlook on life.

You are 55. Are you retiring in 5,10 or 15 years? That would define most of your risk profile.
How long will you be retired? Until you are 70-80-90?
this will modify above maybe.
How much do you have saved (relative to current income)? 6X, 12X, 25X?

If you have 6X income saved or less, I hope you plan to work to age 70.

If you have 12X income saved, can you work another 8-9 years?

If you have 25X income saved, are you planning on retiring soon?

Those last 3 questions will give me more info to get more specific.

[boosami]

The market performance should NOT change your risk profile. Risk is defined more by age, retirement date and your year to year outlook on life.

Jim, that's the best, most concise advice about retirement investing I've read.

Can you just copy and paste that to the next 20-year-old who wants to invest in 90/10% bonds/stocks for retirement because he doesn't want to take a market risk?