These plans have been battered by the sour stock market of 2000 – 2002, corporate scandals, and the mutual fund scandals. Despite this, employee-funded retirement plans, in one form or another, will remain the primary source for building retirement assets for millions of workers. Here are some key ways to make the most of your 401(k).

• Join. One in four are eligible workers doesn’t participate in their employer’s 401(k) plan, according to a recent survey by Plansponsor, and participation rates have declined the past two years.

• Hold steady or even increase contributions. The beauty of steady dollar-cost-averaging in a 401(k) plan is that when stocks are down, you’re able to buy more shares or stock for the same amount of contribution dollars – with the idea that they’ll eventually grow in value, while at the same time your older “down” securities will regain value as the market rebounds. The key is to not have money invested in stocks that you will need in the next few years.

• Make the match. At the very least, contribute enough in your 401(k) plan to meet the minimum company match – typically three percent of salary. This is free money! Though some employers have suspended matches, most are maintaining their previous match percentages.

• Create an investment plan. By having clear goals, investment objectives to reach those goals, and an understanding of investment risk and your own tolerance for risk, you are less apt to get caught up in the temporary ups and downs of the market.

• Avoid borrowing from your plan. The first drawback from borrowing is that you will likely reduce the ultimate size of your 401(k) nest egg because you’re hurting the opportunity for the money to grow tax deferred. You also run the risk of facing taxes and penalties if you fail to repay the loan – say, due to being laid off.

• Don’t cash out. A recent survey by Hewitt Associates found that 42 percent of employees taking 401(k) distributions in 2002 cashed out of their plan when changing jobs. This normally results in taxes, possible penalties, and definitely the loss of tax-deferred growth.