With all the bad news going around nowadays, individuals who have 401(k) plans have some good news. Earnings on 401(k) policies have been sneaking up over the past year according to press announcements from various outlets.
Do not be concerned about retirement
The Huffington Post explained that there are lots of people in "Generation Y" who are really negative about having a possible retirement. Soon to be retirees and current ones were really upset when their 401(k) plans were practically lost over the last few years as the economy got really bad.
A bunch of 401(k) plans and accounts are starting to make more money now, which is some great news for many people nearing retirement, according to USA Today.
Going up by 25 percent
Reports vary, but a variety of studies and releases from various businesses indicate healthy gains in the last few years. Lipper, according to USA Today, reports the average stock mutual fund has appreciated 11.4 percent over the year. Since 401(k) plans are essentially a tax-protected mutual fund with some elements of a trust or other maturing asset, many will have gained that much or possibly more.
Since 2009 when the industry hit rock bottom, the typical stock mutual fund really increase 124 percent, according to Lipper, which is good news. At the start of the year, the typical 401(k) account had $70,970, according to Aon Hewitt, which increased to $74,380.
In the last three years, the average employer-sponsored retirement plan appreciated 25 percent, according to investment firm funds Advisor. The 401(k) plans appreciated 28 percent, according to Time magazine.
Various states saw various increases too. The red states saw a 28 percent increase while blue states only saw 25 percent. Individuals in Arkansas only saw a 1 percent increase while those in Mississippi saw an 80 percent increase.
Most gains
If there's a typical thread through some of these, both USA Today and Time both report that the largest gains were universally realized by people who continually contribute to their 401(k) policies.
The way the accounts are intended to work is a kind of "snowball" impact. Roll a snowball down a hill, it gets bigger. Same thing with a 401(k) or Roth or other type of retirement account; the more one contributes and continues to do so, the more it accumulates. Even though it means just a little money out of pocket per month, it's almost like making a personal unsecured loan to one's self.
Do not be concerned about retirement
The Huffington Post explained that there are lots of people in "Generation Y" who are really negative about having a possible retirement. Soon to be retirees and current ones were really upset when their 401(k) plans were practically lost over the last few years as the economy got really bad.
A bunch of 401(k) plans and accounts are starting to make more money now, which is some great news for many people nearing retirement, according to USA Today.
Going up by 25 percent
Reports vary, but a variety of studies and releases from various businesses indicate healthy gains in the last few years. Lipper, according to USA Today, reports the average stock mutual fund has appreciated 11.4 percent over the year. Since 401(k) plans are essentially a tax-protected mutual fund with some elements of a trust or other maturing asset, many will have gained that much or possibly more.
Since 2009 when the industry hit rock bottom, the typical stock mutual fund really increase 124 percent, according to Lipper, which is good news. At the start of the year, the typical 401(k) account had $70,970, according to Aon Hewitt, which increased to $74,380.
In the last three years, the average employer-sponsored retirement plan appreciated 25 percent, according to investment firm funds Advisor. The 401(k) plans appreciated 28 percent, according to Time magazine.
Various states saw various increases too. The red states saw a 28 percent increase while blue states only saw 25 percent. Individuals in Arkansas only saw a 1 percent increase while those in Mississippi saw an 80 percent increase.
Most gains
If there's a typical thread through some of these, both USA Today and Time both report that the largest gains were universally realized by people who continually contribute to their 401(k) policies.
The way the accounts are intended to work is a kind of "snowball" impact. Roll a snowball down a hill, it gets bigger. Same thing with a 401(k) or Roth or other type of retirement account; the more one contributes and continues to do so, the more it accumulates. Even though it means just a little money out of pocket per month, it's almost like making a personal unsecured loan to one's self.
This article collected, selected and written by: Author Van Hoc
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