401(k) tips for a bad economy

For more information on managing your largest investment, check out Gerri Willis' "Home Rich," now in bookstores.

NEW YORK (CNNMoney.com) -- I am 21 years old with a pretty good job. They have an awesome benefits package. I just became eligible for the 401(k) benefits. Now I am wondering with the current state of the economy, should I opt into the program given my age? - Jon, New York

You're in a great position Jon. The sooner you start socking away money in your 401(k), the more money you'll accumulate when you retire.

And if your company offers a 401(k) match, that's free money right there. And while the economy is on shaky ground right now, the fact that the stock market has been hitting lows means that stocks are on sale.

That's one bargain you can't afford to pass up.

Stopping your contributions is rarely a good idea for several reasons. One - you miss out on the free money - an employer match. Two - people often forget to restart contributions. Three - It's impossible to time the market in order to catch the uptick in stocks.

If you missed the 20 best days in the market - your returns crater 43%, according to one study. And, finally, if you buy during a down market you're lowering your overall cost of investing.

Stocks are cheap - you wouldn't intentionally avoid a sale on other items - like groceries or clothes - yet people always want to back out of the stock market when it's weak.

Stop your contributions only if you are in real financial trouble and have no other sources of cash - high medical bills or tuition payments, for example.

What is the difference between how your money is insured by a bank versus a credit union? - Jeff

There isn't a lot of difference. Your bank accounts are insured up to certain limits by the FDIC (as long as you're with an FDIC-insured bank) and the money you have in a credit union is insured up to the same limits by the insured by the National Credit Union Share Insurance Fund.

Make sure your credit union is a member of the National Credit Union Association - or NCUA.

Here are those limits again: $100, 000 for individual coverage; $200,000 for joint accounts and $250,000 for retirement accounts.

I'm 25 years old and have yet to get into the investment game. With the market so low, is now a good time to get in? Where do I start? - Alexa, Oregon

Now is a good time to get into the market says Tom Orecchio of financial planning firm Greenbaum and Orecchio.

If you're a long-term investor - meaning you want to keep your money in the market for over five years, you may consider investing in a broad index fund. This will give you exposure to a wide range of investments and the fees are generally the lowest around.

You may also consider investing in a life cycle or life target funds. These are funds that you can set and forget. Just pick the date that you think you'll withdraw the funds and it will rebalance itself according to your risk tolerance.

For some low-cost options, check out Vanguard.com and Fidelity.com.

Are you retired or approaching retirement and worried about your economic future? Gerri Willis is looking for people willing to share their concerns about the financial crisis and how it's impacting their investments, lifestyle and/or retirement plans. If you're interested in being featured on CNN, please email us your name, contact information and a photo, along with a brief summary of your situation.