Q My wife and I will be retiring a year from now. We both will have defined benefit pensions through the Minnesota Teacher Retirement Association. We have a relatively nonextravagant lifestyle and plan to live primarily on our pensions. Our financial adviser tells us that we are well diversified with a moderate amount of risk. We have been maxing out our 403(b) contributions for the past several years and we both receive employer matches up to $2,000. We have no debt, our home and cars are paid for and we pay off our credit cards.

We are concerned to see the value of our investments going down each quarter. Because we're so close to retirement, is it still a good idea to continue pouring money into our 403(b) accounts, or would it be better to build up our cash reserves?

LARRY

A Despite all the cataclysmic turns in the market, you're in good shape. For one thing, you have no debt. For another, you're well diversified.

I'm normally reluctant to recommend cutting back on retirement savings contributions. That said, at your stage of life and with your sound balance sheet, I don't see any reason why you shouldn't make a minor adjustment in where your savings go. You'll continue to take advantage of the employer match, and that's where the real investment return in a retirement savings plan is generated. You'll still enjoy a good tax shelter, yet you'll build up your "emergency" savings, which, considering how well you have managed your finances, could turn into an "opportunity" fund. I would keep the money in a very safe parking place, from FDIC-insured accounts to U.S. Treasury bills. You won't make much interest but the money will be there when you need it -- or want it.

Chris Farrell is economics editor for American Public Media's "Marketplace Money." Send questions to cfarrell@mpr.org, or to kaching@startribune.com. Put "Your Money" in the subject line.