Downturn offers consumers a chance to boost nest eggs, savings for college

Given the drop in stock prices over the past two weeks, for example, bargain hunters should consider making their portfolios more aggressive. For the same reason, parents may think it’s a good time to start a 529 college savings plan.

Meanwhile, interest rates on mortgages and car loans are near record lows.

They are admittedly small comforts at a time when nest eggs are shrinking and anxiety about job security is high. But seizing such opportunities will be increasingly vital as household budgets continue to feel the pinch. For those with some flexibility, consider these moves:

Strengthen retirement savings - Even if it feels a bit uncomfortable, the best time to buy stocks is when prices are low.

If you already own shares of a company you believe in, buying more at a lower price would reduce your average cost per share.

Another option is simply to reallocate how your 401(k) assets are invested. If you typically have 60 percent of your portfolio in stocks, for example, you might feel it’s worth pushing that figure up to 65 percent. That means more of your money will be positioned to grow when the market rebounds.

Another investment option is the Roth IRA. Unlike 401(k) plans, investors pay taxes on contributions rather than on withdrawals. It’s a difference worth noting as lawmakers look for ways to dramatically reduce the deficit. At the very least, being able to withdraw tax-free money from a Roth IRA could be a smart way to diversify retirement income, notes Christine Benz, personal finance director with Morningstar. That’s because Roth IRAs can help keep you in a lower tax bracket, since you already paid taxes on contributions.

Capitalize on low mortgage rates - Rates are poised to go even lower. Any homeowners who felt that the opportunity to refinance was slipping away will probably have more time. The average rate on a 15-year mortgage, a popular refinancing option, fell to 3.54 percent last week. That’s the lowest level since Freddie Mac began tracking the rate in 1991.

A few points may not seem like a lot. But the difference in the monthly payment on a 4 percent loan and a 6 percent loan is more than $150 a month if you borrow $150,000 over 15 years.

Anyone looking to become a first-time homebuyer may also want to take advantage of the low rates. It’s not clear how much longer financing will stay so cheap, but mortgage rates track the yield on the 10-year Treasury note. When the economy weakens, yields tend to fall as investors shift money from stocks to safer bonds.

Ramp up college savings - It might be a good time to open a 529 plan, which lets families sock away tax-free savings in an investment portfolio to pay for college. The maximum lifetime contribution varies but is often as high as $300,000.

Candice Choi writes for the Associated Press.