When Stock Options Aren't the Best Option

Don't overdose on company stock in your 401(k).

Fountain pen on stock chart.
(Image credit: Getty Images/iStockphoto)

If you have been afraid to open your 401(k) statement for the past few months, now is the time. Open it. Read it.

While this is sound advice for everyone with a 401(k), it is critical for workers whose plans include a company-stock option. "In addition to tremendous exposure to company stock in their 401(k) plans, many people have stock options, so their financial security -- even their employment -- is all based on the success of one company," warns Mark Cortazzo, senior partner of the Macro Consulting financial-planning group, in Parsippany, N.J. "If there is a significant downturn in business, the value of the stock goes down, the equity of their options disappears, their retirement savings are decimated, and they could become unemployed."

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