401(k) Savers Survived Bear Market

[Yo_Mama_Been_Loggin]

What the fuck are these guys talking about? My 401K took a big hit under chimpy's watch. Could the average account balance increase be due to employee contribution along with money ones employer matches?

By EILEEN ALT POWELL, AP Business Writer

NEW YORK - Most Americans who invest in 401(k) retirement savings accounts weathered the 2000-2002 bear market downturn pretty well, according to a research report issued Monday.

The average account balance at the end of 2003 was $76,809, up nearly 30 percent from $59,510 a year earlier thanks to the stock market recovery, the study found. And it was also up more than 17 percent from the average $65,572 in accounts at the end of 1999, before the market downturn, it said.


"401(k) participants were undeterred by the bear market," said Sarah Holden, a senior economist with the Investment Company Institute in Washington, D.C., who was co-author of the report.


The study was prepared by the ICI, a mutual fund trade group, and the Employee Benefit Research Institute, a nonprofit research organization that is also based in Washington.

-more-

http://story.news.yahoo.com/news?tmpl=story&cid=530&e=4&u=/ap/20040809/ap_on_bi_ge/retirement_savings

[swag]

1. Yes, both of those things that you suggested (contribution + match)

coupled with a strategy of dollar-cost averaging (or advantageously investing during market downturns, for the lucky ones) could certainly mean decent 401k stability during the huge crash. Those things and a well diversified portfolio (us stocks, bonds, reits, international stocks, preferably held in low cost (read: index) mutual funds or baskets of securities purchased with very low commissions) could spell decent progress on the part of 401k investors.

[Zynx]

2. That is very misleading. They grew because of contributions to them.

If my stock account fell from $1,000 to $600, but I put another $500 in it, it would look like it grew to $1100.

[Demonaut]

3. uh, someone forgo to tell my 401k, its lost over $8,000 in the last 12

months

[Suziq]

11. My Friend's 401K . . . .

Someone forgot to tell her 401k as well. She lost over $30,000! :grr:

I was lucky enough to have most of my 401k in "safe savings" so my hit was not too bad. Good thing I waited to diversify.

:hippie:

[still_one]

4. BULL SHIT

I know people whose 130000 dollar accounts went down to 20 thousand...

[swag]

5. The article is not misleading

It references "average account balance." I would suggest any 401k investor who doesn't know what that means should either read a book or consult a fee-based financial planner who is not trying to sell you a bunch of bullshit.

If you quit contributing to your 401k while your financial picture in all other aspects remain the same, the balance in your 401k cannot be entirely blamed on the markets or the economy.

[Yo_Mama_Been_Loggin]

7. I haven't quit contributing.

But the best that's done is at best keep my balance at the same level.

[swag]

10. I am sorry to hear that.

Maybe it's time to re-examine your asset allocation strategy.

[BlueEyedSon]

6. My 401K is now a 201k....

:grr:

[unblock]

8. well, keep in mind who the audience for this type of story is

what they're saying is that "the 401(k) business" is not drying up. there's still money to be made by running a 401(k), there's still 401(k) money available to invest in mutual funds, and so on.

it's not saying the 401(k)s profitted. in fact, it's saying that they lost money on investments, but these losses were covered by additional contributions.

the main point is that the investment losses didn't lead people to abandon their 401(k), stop contributing, and/or withdraw funds.

[stevedeshazer]

9. My 401k?

I don't have one anymore. After losing almost half its value, I became unemployed. I've had to spend what was left.