With all the not so great news going around these days, 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 releases from several outlets.
Performance of 401(k) plans might ease that retirement anxiety
When the economy tanked, so did most 401(k) accounts invested mostly in stock. That meant a lot of retirees and soon-to-be retirees were really struggling for a few years. Now, "Generation Y" is really negative about the chance of retirement.
USA Today pointed out that a number of people are beginning to stress less about retirement as their 401(k) policies and accounts are beginning to rebound and earn cash again. It is pretty exciting for lots of people.
A 25 percent increase
Reports vary, but a variety of studies and releases from numerous corporations indicate healthy gains in the last few years. Lipper, according to USA Today, reports the typical stock mutual fund has valued 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 great 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 valued 25 percent, according to investment firm funds Advisor. The 401(k) plans appreciated 28 percent, according to Time magazine.
Various states saw different 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.
Seeing largest gains
People who contributed to their 401(k) policies regularly saw the most gains, which both Time and USA Today reported to be a common thing.
If you can put a little more cash into your account every month, it will be able to make a lot more cash in the end. It is a "snowball" impact where the snowball gets bigger as it rolls down the bill and gets more snow. The 401(k) will get bigger without putting additional money in, but it can gain more if you put extra cash in regularly.
Performance of 401(k) plans might ease that retirement anxiety
When the economy tanked, so did most 401(k) accounts invested mostly in stock. That meant a lot of retirees and soon-to-be retirees were really struggling for a few years. Now, "Generation Y" is really negative about the chance of retirement.
USA Today pointed out that a number of people are beginning to stress less about retirement as their 401(k) policies and accounts are beginning to rebound and earn cash again. It is pretty exciting for lots of people.
A 25 percent increase
Reports vary, but a variety of studies and releases from numerous corporations indicate healthy gains in the last few years. Lipper, according to USA Today, reports the typical stock mutual fund has valued 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 great 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 valued 25 percent, according to investment firm funds Advisor. The 401(k) plans appreciated 28 percent, according to Time magazine.
Various states saw different 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.
Seeing largest gains
People who contributed to their 401(k) policies regularly saw the most gains, which both Time and USA Today reported to be a common thing.
If you can put a little more cash into your account every month, it will be able to make a lot more cash in the end. It is a "snowball" impact where the snowball gets bigger as it rolls down the bill and gets more snow. The 401(k) will get bigger without putting additional money in, but it can gain more if you put extra cash in regularly.
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