How Has YOUR 401k Performed With Regards To Year-To-Date Earnings (Or Losses) In 2008?
October 6th, 2008 by MG
How much has YOUR 401k plan lost this year?
During a recent conversation, I was shocked to find that so many people were so far down in their 401k year-to-date totals. Having withdrawn funds and searched for a better way to invest a couple years ago, I’ve been somewhat sheltered from the hammer that’s smashed a lot of dreams for those either facing retirement, or hoping to in the near or near-distant future.
CDs and ING Direct “Orange” savings accounts have returned reliable returns for me, even if they paled in comparison to the people earning 10-15% or more on their 401k plans. Reading up on insurance investing (via “EIUL” plans or Equity Indexed Universal Life) and trying to decide whether a non-matching 401k would be best or something less conventional would be better, I’ve had my money in limbo so to speak.
It seems that the time I spent losing out on thousands in the market, has come to pay itself back in gold after the adjustments hits, the Dow crashed, and the bailouts started picking up steam.
But just like those who were shocked that a house could… LOSE value… I was no different when it came to 401k performance. I would have figured the smart guys in the expensive chairs had some backup plans to mitigate heavy losses, but it seems that my confidence was misplaced. My 3% interest on my savings account started looking very good compared to some of our below commenters.
So have you lost? Have you gained? How is the market treating your 401k, and will it affect retirement in your immediate future?
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Personal Rate of Return from 01/01/2008 to 10/03/2008 is -33.9%
You win, mines only down 12.6%
I’m sure I’d win..
Personal Rate of Return from 01/01/2008 to 10/03/2008 is -97.3%
Who needs freakin retirement anyways, I’m going to work until I die at this rate.
Ouch! What the heck did you invest in?
Let’s just put it this way.. I lost more money than i put in this year.
Mine is probably down 15-25% now.
Oh well, hopefully it fixes itself before I want to retire.
Don’t sweat not having a matched 401k…
That free 3% company match ain’t helping me at all these days…
Yeah it just slows the loss….
It will come back up. You will probably only lose money if you start trying to take it out now.
Down 30%, hope it goes down to -50% for a solid 5-6 months so I can get all types of extra shares with my $$.
That’s why you stick it in a CD. They are about 3% right now..
You should talk to CHUCK!
Chuck is the dude giving me .15% return…
What kind of money are we talking?
Right now I would go with FDIC or SIPC insured products. also it depends on your age. Can you recover the losses? You should review your investments at least once a year.
You should look at the long term. I think most of this crap in the market right now will pass.
If you can afford it, buy stocks or mutual funds while they’re cheap so you can profit in the future.
Remember, an IRA isn’t one type of investment. You can have cash, gold, stocks, bonds, whatever in your IRA. Stocks are sucking shit right now but do best over the long haul.
If you can’t afford to lose any principle in the short term, you want your money in FDIC insured CD’s or cash. You won’t earn much (not even enough to keep up with inflation in this market) but its pretty safe.
My bank has a 58 month CD, 5k, at 5% APY right now
Reg. rates are about 3.85 on 10k for 24 months.
Food for thought for those fearing the short term…
I’m afraid to look again…
My 401k was down 16% last time I looked and then Wachovia went belly up
For the guy with the IRA..
Absolutely, you should keep contributing to your IRA. You should make sure to get a ROTH IRA….the ROTH IRA, you put in dollars that are pre-tax and then they tax it when you withdraw it.
With a ROTH, you put in dollars that already have been taxed and they do not pull it out when you withdraw it (at 59.5 years or for your first house and a couple other stipulations).
How much do you need to get started?
Depends on the company. I started one with Vanguard for $1000. Check out index funds. They mirror the makeup up a major index like the S&P500. Their expenses are very low (so more money makes it to you) because they’re not constantly researching and trading trying to beat the market.
Something like 80% of actively traded mutual funds actually do WORSE than index funds that are on auto-pilot.