After years of stagnation, 401(k) policies are starting to earn money again, which is really good news for many people. Those looking down the barrel of retirement and those just beginning to save for it are sure to be happy.
Stay away from anxiety
In the past few years, many people who have 401(k) policies were shocked to see them go from being nest eggs to rotten ones as the stock industry tanked. A large number of current and soon-to-be retirees were mortified and cast into uncertainty. According to the Huffington Post, a number of surveys of individuals in what is called "Generation Y," the people born after Generation X and missed out on wearing flannel, have indicated this demographic are somewhat pessimistic about retirement.
However, a number of surveys, studies and data released to the press recently might curb a bit of that retirement anxiety, according to USA Today. A good number of 401(k) plans or rather 401(k) accounts are beginning to earn again.
Going up by 25 percent
Many people have gained at least 11.4 percent or more in their 401(k) plans since they are basically tax-protected mutual funds. The typical stock mutual fund increased 11.4 percent during the last year, according to Lipper reports. There are a lot of different numbers being reported, but they are all positive, according to USA Today.
The average 401(k) plan had $74,380 in it, according to Aon Hewitt. That is great news since it was $70,970 at the beginning of the year. The typical stock mutual fund increased 124 percent since 2009, according to Lipper, which is also good.
During the last three years, the average employer-sponsored retirement plan appreciated 25 percent, according to investment firm funds Advisor. The 401(k) policies valued 28 percent, according to Time magazine.
There was an 80 percent increase seen in Mississippi and 1 percent in Arkansas, so it certainly varied a lot by states. Blue states saw 25 percent increases while red states saw 28 percent increases.
Putting in money regularly
If there's a common thread through some of these, both USA Today and Time both report that the largest gains were universally recognized by people who continually contribute to their 401(k) policies.
The way the accounts are supposed to work is a sort 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 loan to one's self.
Stay away from anxiety
In the past few years, many people who have 401(k) policies were shocked to see them go from being nest eggs to rotten ones as the stock industry tanked. A large number of current and soon-to-be retirees were mortified and cast into uncertainty. According to the Huffington Post, a number of surveys of individuals in what is called "Generation Y," the people born after Generation X and missed out on wearing flannel, have indicated this demographic are somewhat pessimistic about retirement.
However, a number of surveys, studies and data released to the press recently might curb a bit of that retirement anxiety, according to USA Today. A good number of 401(k) plans or rather 401(k) accounts are beginning to earn again.
Going up by 25 percent
Many people have gained at least 11.4 percent or more in their 401(k) plans since they are basically tax-protected mutual funds. The typical stock mutual fund increased 11.4 percent during the last year, according to Lipper reports. There are a lot of different numbers being reported, but they are all positive, according to USA Today.
The average 401(k) plan had $74,380 in it, according to Aon Hewitt. That is great news since it was $70,970 at the beginning of the year. The typical stock mutual fund increased 124 percent since 2009, according to Lipper, which is also good.
During the last three years, the average employer-sponsored retirement plan appreciated 25 percent, according to investment firm funds Advisor. The 401(k) policies valued 28 percent, according to Time magazine.
There was an 80 percent increase seen in Mississippi and 1 percent in Arkansas, so it certainly varied a lot by states. Blue states saw 25 percent increases while red states saw 28 percent increases.
Putting in money regularly
If there's a common thread through some of these, both USA Today and Time both report that the largest gains were universally recognized by people who continually contribute to their 401(k) policies.
The way the accounts are supposed to work is a sort 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 loan to one's self.
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