By BRETT ARENDS

Chances are you have a 401(k) plan at work. And the chances are you’re not making nearly enough of it. A new year means a new leaf: This is as good a time as any to start turning that around.

If you’re letting your 401(k) languish, a report released over the holiday season shows that you’re not alone. According to the latest study by the Employee Benefits Research Institute, a think tank in Washington, most of us continue to neglect our 401(k) plan. The median account contains a balance of just $18,000, says EBRI.

Good luck with that.

Here’s a five-step plan to fix your 401(k).

1 Take control.

Take a look at the full range of investment choices available to you. That should include, at a minimum, a handful of low-cost domestic and international stock and bond funds. If your plan doesn’t even offer those you should talk to the people in charge at your employer and insist that they move to a better plan.

Many people are too intimidated, or busy, to choose their portfolio. If you’re in that camp, your plan will have dumped your money into a default portfolio—such as a low-yielding but “stable” fund, or a target-date fund ostensibly designed for someone of your age.

There is nothing inherently wrong with these funds. But that doesn’t mean you can rely on them, either.

These default options aren’t designed for your best interests, but for the best interests of your plan provider. Instead of maximizing your likely returns, they are designed to minimize the provider’s risk of a nasty lawsuit.

As a result, your money may well be sitting in a poorly designed portfolio that guarantees mediocre performance. Target-date funds, for example, are a great idea in theory. In practice, most are far too heavily weighted toward U.S. stocks, and they use a cookie-cutter approach to investing.

Consider the alternatives available to you.

You also should understand if your company makes matching contributions, and, if so, how much it will match. There’s no good reason for missing out on a company match. It’s also a good idea to find out if your plan allows such things as personal loans: This may offer you access to cheaper capital than a bank, although there are risks in borrowing from your plan.

2 Cut your costs.

Many 401(k) plan providers stock their plans with high-fee mutual funds. That’s great for them, and bad for you. Most mutual funds are far too mediocre to justify hefty fees, which just soak up a lot of your investment returns. A fund that charges you an extra 1% a year may end up costing you most of the tax benefits of your plan.

There are managed investment funds out there that are worth the money, but few of them—if any—are likely to find their way into a 401(k) plan. If you’re stuck with plain-vanilla funds, you are going to be better off going for the ones with the lowest costs. Nearly all the time your best options will be the low-cost index funds.

3 Lighten up on U.S. stocks.

Most people keep most of their stock-market investments in the U.S. It’s safer, right? I mean, it’s the home market so it’s less risky than foreign stocks, yes?

That’s what conventional wisdom says, but it’s hooey. Investors sell themselves short by investing too much in the U.S.A. You’re already overinvested here anyway—you have your life and career here.

And U.S. equities start 2012 looking relatively expensive. U.S. stocks today are somewhere between modestly and heavily overpriced when compared to such metrics as average earnings or the value of corporate assets, according to data from the Federal Reserve and data tracked by Yale University economics professor Robert Shiller.

The dividend yield on the Standard & Poor’s 500-stock index, at just 2.1%, is very low by historical standards.

Predicting future stock-market returns is notoriously difficult. But based on current valuations, the U.S. stock market seems to offer a mediocre bet.

4 Look internationally.

Many 401(k) plans go light on international investment options. The real reason is simply the incompetence and complacency of plan sponsors.

But if your plan offers international options, take advantage. The turmoil of 2011 has left many overseas stock markets looking like a good value.

Western European markets fell nearly 30% from last year’s peak. Japan’s Nikkei 225 index is now lower than it was during the tsunami panic nearly a year ago. Emerging markets from Brazil to India, the investment hotshots of 2010, have dropped dramatically out of fashion again. Their stock markets crashed last year.

These offer some excellent buying opportunities.

Emerging markets account for about a third of the world economy, and their share is growing. Developed overseas markets, meaning Europe, Japan and Australasia, account for about two-fifths. They are on sale, and most people are underinvested there.

5 Review your bond funds.

As a general rule, your 401(k) and other tax shelters are where to hold the bond portion of your portfolio. That’s because bonds are much more vulnerable to taxes than stocks.

Bonds generate most of their returns through coupons, and those are usually taxed at ordinary-income tax rates. By contrast, stock dividends and capital gains generally get taxed more lightly.

Right now is, admittedly, a risky time to invest in U.S. bonds. Yields on U.S. Treasurys have slumped to historic lows. Any pickup in the economy, and inflation, could send bond funds tumbling.

While Treasury bonds offer meager yields here, look at any corporate bond funds. That includes investment-grade bonds and more volatile high-yield bonds.Both offer somewhat better yields. Emerging-markets bonds offer particularly good opportunities, argues investment guru Rob Arnott, chairman of Research Affiliates. They pay higher interest rates than those in the U.S., while their governments’ finances are actually in better shape.

It’s crazy that most 401(k) plans offer such a limited range of investment options. Paradoxically you don’t get full control of your money unless you leave your employer, when you can roll the plan over into a self-directed individual retirement account. But your 401(k) still represents a great investment asset, and this is a good time to get it into shape.

Write to Brett Arends at brett.arends@wsj.com

The skies are alive with color—even more so than usual. The dancing streaks of light in the night sky, known as the aurora borealis or Northern Lights, are expected to be especially vivid this year. Increased solar activity is to thank for the dancing flashes of emerald, pink, violet and yellow, says Phillip Chamberlin, deputy project scientist for NASA’s Solar Dynamics Observatory.

Now through the end of March is prime time to see the lights. For optimal viewing, get away from city lights and keep watch between 10 p.m. and 2 a.m. Mr. Chamberlin says the aurora may be pushed farther south this year; just in case, here are few memorable ways to gaze in northern latitudes.

—Kathleen Squires

Sail the Fiords in Norway

Cruise Norway’s west coast to aurora’s epicenter on a six- to 12-day cruise between Bergen and Kirkenes. Hurtigruten’s fleet crosses the Arctic Circle, promising some of the best chances to view the Northern Lights. Calm, ice-free waters come courtesy of the Gulf Stream—all the better to watch the skies while soaking in a top-deck hot tub, glass of Champagne in hand. Snoozers can turn on the “aurora alarm” to be notified when the lights appear, while night owls can try to catch the display on sledding and snowmobiling excursions in the wee hours. From about $840 per person for six nights, hurtigruten.com

Ski Glaciers in Greenland

Cross-country ski over snow fields, frozen fiords and pristine glaciers (while someone else takes care of your baggage). On Iceland Mountain Guides’ eight-day trip, guests spend nights in tents and hostels far away from urban sources of light—perfect front-row seats for aurora appearances. From about $2,300 per person, mountainguides.is

Snuggle in a See-Through Igloo in Finland

Waking in the middle of the night to see rainbows overhead is a real possibility at Hotel Kakslauttanen’s Igloo Village in northern Lapland. Their 20 glass igloos have thermal panes that keep the digs warm and prevent frosting. With reported visibility in the region 200 nights a year, chances are good for sightings inside this remote and dreamy dome. The sculptures in the property’s “ice gallery” provide even more eye candy. From about $220 per person per night, kakslauttanen.fi

Soar the Skies in Sweden

An excellent way to get up close and personal with the illuminations: Charter your own flight. The Ice Hotel in Jukkasjärvi in Sweden’s Lapland region organizes excursions in a nine-seat plane, window seats only. Fly above the clouds into the auroral oval, the astral area encircling the polar north, then celebrate with a drink in the Absolut Icebar before retiring to an ice-block bed covered in reindeer pelts and thermal sleeping bags. From about $640 per seat, icehotel.com

Are there any recent novels about the Great Depression of the 1930s? Would you please give me some examples?

—I.J. Satterfield, Austin, Texas

Making art out of suffering: That’s fiction of the Great Depression. Even the novelists of the time found it difficult to put into words what they were seeing first hand. John Steinbeck was supposed to be writing an article on migrants to California for Life magazine, but he was so staggered by the misery he witnessed that he decided he couldn’t possibly be objective.

“The empathetic writer, burdened by a guilty sense of privilege, was invariably radicalized by what he saw on the road, by his exposure to so many marginal and miserable people, the detritus of the American dream,” wrote Morris Dickstein in “Dancing in the Dark: A Cultural History of the Great Depression.”

Steinbeck’s 1939 novel “The Grapes of Wrath,” which won a Pulitzer Prize, shaped “a geography of conscience,” Don DeLillo wrote. But to some critics, it was just more pandering and mawkish propaganda that appealed mainly to “liberal middlebrows.” Fiction was politicized by the Depression, sometimes at the expense of the craft. Other so-called proletarian novels published during the Depression (James T. Farrell’s Studs Lonigan trilogy, John Dos Passos’s U.S.A. trilogy; Erskine Caldwell’s “Tobacco Road”; Jack Conroy’s “The Disinherited”) were also derided as naive, misguided and more ideological than artistic.

The best-seller lists of the 1930s suggest a nation seeking escape rather than faithful reflections of their plight. The best-selling novel of 1932 was Pearl S. Buck’s “The Good Earth”; in both 1933 and 1934 it was “Anthony Adverse” by Hervey Allen, a picaresque historical romance that begins at the end of the 18th century.

I was surprised while researching this question to find how relatively few modern novels are set in the 1930s compared, say, to historical fiction set during the Civil War or the Gilded Age. Oddly, there seem to be more Depression-era novels aimed at young adults than adults, including Christopher Paul Curtis’s “Bud, Not Buddy”; Karen Hesse’s “Out of the Dust”; Richard Peck’s “A Year Down Yonder”; Pam Munoz Ryan’s “Esperanza Rising”; and Mildred D. Taylor’s “Roll of Thunder, Hear My Cry.” Something about adolescents dealing with sudden poverty obviously fires writers’ imaginations—or is there a subconscious desire to show today’s youth just how fortunate they are?

E.L. Doctorow has set several of his novels, including “Loon Lake” and “World’s Fair” in the Depression. William Kennedy (“Ironweed”); Sarah Gruen (“Water for Elephants”); Tony Earley (“Jim the Boy”); and Tom De Haven (“Derby Dugan’s Depression Funnies”) have also found inspiration in the Depression.

A few other contemporary novels set in the 1930s:

“The Many Deaths of the Firefly Brothers” by Thomas Mullen. The Firefly Brothers are bank robbers who become folk heroes to people who “felt abandoned by country and law and God and all the things they had been taught to believe in…. They were seen as Robin Hoods for a modern, disenchanted and very disorienting age.”

“The Big Both Ways” by John Straley. In the Pacific Northwest in 1935, an unemployed logger joins forces with a union organizer and flees with her (and a couple of dead bodies), eluding pursuers as they sail from Seattle to Alaska.

“Kings in Disguise” by Dan E. Burr and James Vance. A graphic novel about a young man whose unemployed father disappears. The boy hits the road—the railroad—to find him; he also finds hobo jungles and Hoovervilles.

“Clara Callan” by Richard B. Wright. Two Canadian sisters struggle through the Depression, one in a tiny Ontario town, the other in New York City.

There is some superb nonfiction about the Great Depression that’s as compelling as fiction. Studs Terkel’s oral history “Hard Times” was, Mr. Terkel wrote, “an attempt to get the story of the holocaust known as The Great Depression from an improvised battalion of survivors.” Frederick Lewis Allen’s “Since Yesterday” is a concise chronicle of the decade. Timothy Egan’s “The Worst Hard Time” tells of the people who, unlike John Steinbeck’s “Exodusters,” stayed in the Dust Bowl during the Depression. And of course James Agee’s “Let Us Now Praise Famous Men,” with photographs by Walker Evans, packs as powerful a punch today as it did when it was published in 1941.

“In periods of economic crisis,” wrote Mr. Dickstein, “fiction falls in with journalism and photography as a way of documenting human misery and sometimes sentimentalizing its victims.”

—Send your questions about books and reading to Cynthia Crossen at booklover@wsj.com.

Send your prediction to
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by midnight EST Sunday, with your full name, city, state and phone number. The first reader who gets it right will be named in next Saturday’s paper.

On Thursday, retailer Sears Holdings will unveil fourth-quarter earnings. This year, the company’s stock has returned an astounding 66%. What will the share price be at the market close on Thursday?

Congratulations to Omar Darr of Whitefish Bay, Wis., for coming closest to guessing Zynga‘s revenue of $311 million in the fourth quarter.

Sixty federal tax provisions expired in 2011, but one stands out for causing older taxpayers trouble: the individual-retirement-account donation rule.

This popular provision allows IRA owners 70½ and older to contribute up to $100,000 of IRA assets directly to a tax-free charity. Such donations aren’t tax-deductible, but neither do they count as income that might trigger higher taxes on Social Security payments or higher Medicare premiums. Now this benefit is gone, at least until Congress restores it.

“It didn’t have to be this way,” says George DeBaker, an 83-year-old retired education administrator living in Fort Myers, Fla. In the past Mr. DeBaker gave his entire five-figure required IRA withdrawal directly to several church-related charities; he would like to do so again this year but is waiting for lawmakers to reauthorize the law for 2012.

“I wish Congress would get its act together, because this is very frustrating,” adds George Papadopoulos, Mr. DeBaker’s financial planner in Novi, Mich., echoing the sentiments of many others.

No fix is in sight, although many experts think lawmakers will act eventually. In 2010, the law also expired, and Congress didn’t re-enact it until mid-December of that year. The fix was retroactive to the beginning of the year.

But many would-be donors lost out due to a quirk in the law that could snare people this year, too, says IRA expert Natalie Choate, an attorney with Nutter, McClennan & Fish in Boston.

The problem arises for IRA owners like Mr. DeBaker, because they are over 70½ and must take an annual payout from the account. They want to withdraw as little as possible in order to let the assets expand but also want to donate some or all of the required payout directly to charity.

Under current rules, the first dollars out of an IRA count as the required withdrawal. So if an IRA owner makes a withdrawal before Congress extends the law, he or she can’t redeposit the funds and make a donation of IRA funds after lawmakers act.

Here is Ms. Choate’s advice for handling this dilemma. Donors who know they want to make a donation should go ahead and have the sponsor transfer IRA assets directly to the charity. Assuming Congress makes a retroactive fix, the gift will count as a qualified donation of IRA proceeds.

“If you intend to make a gift no matter what, don’t get all stressed waiting for Congress,” she says. “Ideally they will bless that gift, as they did in 2006, 2009 and 2010. The worst that happens is that you’ll have a taxable IRA payout and a deductible charitable gift.” These may cancel each other out for taxpayers who itemize, leaving no tax burden.

Donors who want to make a gift only if they can do it with IRA assets should be careful to “leave room” for the donation when taking payouts.

Here is an example: Jane’s required IRA payout is $30,000 this year, and she doesn’t want to withdraw more. She wants to give $5,000 of the IRA to her college if she can, but if she can’t she wants to contribute appreciated stock or cash.

In this case, Ms. Choate says, Jane should withdraw no more than $25,000 before Congress acts, in order to leave room for the donation. That is because if Jane withdraws the full $30,000, and Congress reinstates the law, she can’t later reclassify part of it as a donation to the college.

IRA donors who plan to make 2012 gifts should keep in mind other legal requirements, says Conrad Teitell, an attorney at Cummings & Lockwood in Stamford, Conn.

The assets must be transferred directly from the sponsor to a qualified charity, and the gift must be received by year-end. The benefits aren’t available for IRA transfers to most private foundations and donor-advised funds.

—Email: taxreport@wsj.com

Por ANN ZIMMERMAN

Los fabricantes de juguetes están aprovechando la fascinación de los niños con las tabletas y los teléfonos inteligentes para lanzar nuevos juegos que se conectan a aparatos con pantallas táctiles.

En la Feria Internacional del Juguete de Estados Unidos, que se realiza esta semana en Nueva York, Hasbro Inc. promociona el juego llamado “The Game of Life zAPPed”, una nueva versión de su clásico “El juego de la vida”, que permite girar la rueda del juego de manera virtual en un iPad.

Mattel Inc., mientras tanto, ofrece una nueva línea de juguetes llamados “Apptivity”, que permite a los niños usar muñecas Barbie y autos Hot Wheels que incorporan conductores especiales para controlar el movimiento de los juegos en una tableta. “Es toda una nueva categoría”, dice Tim Kilpin, un ejecutivo de Mattel.

No todos están convencidos de que la incorporación de este tipo de tecnología beneficiará a la industria, cuyas ventas en Estados Unidos se han estancado o caído en los últimos años. El año pasado descendieron 2% a US$21.200 millones.

“Las tabletas y los teléfonos son aparatos casi perfectos, para qué añadirles partes o accesorios que los hacen más voluminosos y menos elegantes”, señala Eric Levin, director del fabricante de juguetes Techno Source.

Los ejecutivos de la industria atribuyen el descenso en las ventas de juguetes tradicionales a la mayor competencia de otras opciones de entretenimiento, pero otros expertos citan un problema más básico: la falta de creatividad de los fabricantes, que año tras año producen las mismas muñecas, autos y pistolas.

“Una mayor innovación permitirá que los juguetes mantengan sus parámetros de precio porque el modelo actual no es sostenible”, dice Soren Torp Laursen, subdirector de Lego Company.

Aunque la competencia de precios en los juguetes clásicos se ha intensificado, los fabricantes saben que pueden cobrar un poco más por modelos únicos. La LeapPad Explorer, una computadora tableta para niños de LeapFrog Enterprises Inc., se agotó en la última Navidad y fue revendida en eBay por encima de su precio minorista de US$99 (en EE.UU.).

Los fabricantes llevan años lanzando versiones tecnológicas de sus marcas establecidas, con resultados desiguales.

Han tratado de transformar sus juguetes en franquicias de videojuegos y creado sitios web correspondientes.

Hace poco empezaron a licenciar derechos para hacer versiones físicas de éxitos digitales. A Mattel, por ejemplo, le fue bien con un juego de mesa inspirado en el fenómeno de los videojuegos sociales Angry Birds, de Rovio Entertainment Ltd.

Los nuevos juguetes van un paso más allá. Una versión renovada de Monopolio, de Hasbro, que en EE.UU. cuesta US$25, el doble del precio de la versión regular, usa un iPad, un iPhone o un iPod Touch para hacer transacciones con una tarjeta de crédito o de débito en cuentas virtuales. Los jugadores también pueden retar a sus contrincantes en mini juegos virtuales cuando sacan las tarjetas de Casualidad y Arca Comunal.

Otro nuevo juego en la línea Apptivity de Mattel, que va desde US$10 a US$20, deja que los niños usen sus autos Hot Wheels para controlar un juego de carreras en el iPad.

A algunos padres no les emociona dejar que sus hijos jueguen con aparatos tan caros.

“Me molesta que les lancen tanta tecnología a los niños”, dice Jill Simonian, una madre de Los Ángeles. “Los iPads no son juguetes”.

Otros fabricantes ensayan otra estrategia para aprovechar la afición de los niños por la tecnología. En vez de encontrar maneras de vender juguetes que requieren el uso de las tabletas de los papás, Techno Source apuesta a una tableta para niños llamada Kurio. Con un precio base de US$199, tiene 4.000 juegos disponibles, no vende mercancía virtual y permite a los padres bloquear sitios web que consideren inapropiados.