Since I have just tackled the thorny issue of college savings, why not jump next into the even more thorny issue of retirement savings!

My money strategy is to tackle all of these difficult issues head on. I would rather know now if I am going to have a major problem in 30 years than push it off to worry about another day. So far, the strategy seems to be working. Even if you can’t fix everything wrong with your retirement savings plan, just by paying it some attention, you will start to make at least some positive progress.

Last year, I started a tradition of formally reviewing my 401(k) savings and creating a short written report about how we are doing. (You can download the template I use and some instructions about how to use it here.)

2012 was a terrific year for 401(k)s!

Mutual fund companies and retirement plan purveyors couldn’t ask for a better marketing year for 401(k)s than 2012. In our plans, every single fund increased in value in 2012. Nothing lost money. Nothing! You couldn’t pick a bad investment. Whether it was stocks or bonds or international, it all made money. Just because of the positivity, you should do the detailed 401(k) analysis for 2012.

The best investment of 2012: stocks

If you could time the market, in 2011, you would have put all of your money into bonds but then, in 2012, you would shift it all to stocks. Stocks performed fabulously in 2012! We had gains in some funds of over 35% in one year! Wow! If only every year could be half this good.

2013, what will happen?

The numbers looked so good in 2012 that they honestly scared me. How can every single mutual fund make money? There were zero losing investments? This almost never happens. Yes, the economy seems to be recovering but to have this type of tremendous gains . . . it feels a bit bubble-ish.

So far, 2013 is off to a bit of a rocky start and we probably aren’t going to see 2012 repeat itself. It doesn’t mean it is time to get out of stocks, but rather accept that there is risk in every investment and to make sure your investments are appropriately diversified for your own savings goals.

Do you take the time to check in with your retirement savings each year? What lessons did you learn from 2012? Please share in the comments.